Bitcoin starts a new week with bullish sentiment back on the radar as $64,000 returns.
In a stirring comeback, BTC price action has managed to leave its latest swing lows far behind it, gaining nearly $8,000 versus the pit of last week’s sell-off.
Despite some of those gains coming during the weekend, they proved to have staying power, and during the May 6 Asia trading session, bears are having no luck pushing the market back down.
The mood is thus considerably different into the second week of May — but increasing greed is already visible.
Can Bitcoin and altcoins manage sustainable momentum toward all-time highs?
This is the question that traders and analysts will pose after a trip to two-month lows and a considerable flushing out of leverage.
On exchanges, things remain promising, with funding rates neutral, and there are few signs of a mass desire to long BTC at current levels.
Should things take a turn for the worse, however, it is key support levels that will come in for a fresh test. These include the short-term holder (STH) cost basis and 100-day moving average — both classic bounce levels.
Cointelegraph takes a closer look at the current state of Bitcoin as the average trader recovers from a hair-raising start to the month.
Bitcoin bulls triumphant after weekly close
The weekend ultimately posed no threat to Bitcoin bulls, providing some unexpected upside that ended up holding into the weekly close.
This came in at around $64,000 on Bitstamp, data from Cointelegraph Markets Pro and TradingView confirms — around $900 higher versus the end of April.
While not a giant weekly candle, the performance represents an impressive return to form for BTC/USD, which saw a trip to $56,500 in the intervening period.
Unsurprisingly, market observers are quietly optimistic.
“Swept all the liquidity below that was built up over the past 2 months and bounced quickly afterwards,” popular trader Daan Crypto Trades summarized in part of his latest commentary on X.
“We’re still in the bigger range but at least got some upside momentum going into next week.”
Tony Severino, founder of crypto technical analysis platform CoinChartist, noted similarities between last week’s snap drop and similar ones during the bull market.
“Every higher swing low in Bitcoin since November 2022 was a weekly hammer,” he revealed over the weekend.
“Is this time different?”
In a prior post, Severino added that price was attempting to reclaim the upper monthly Bollinger Band — something acting as support since February.
“This is potentially a positive development,” he suggested.
Data from monitoring resource CoinGlass meanwhile puts BTC/USD up 5.8% in May so far, reducing overall second quarter losses to under 10%.
BTC price levels crystalize
Crypto markets are notoriously fickle and an emerging trend can quickly fade, pulling sentiment down with it.
If Bitcoin sees a change of trajectory, traders and analysts will be interested in seeing to what extent nearby support levels succeed at limiting any fresh downside.
Michaël van de Poppe, founder and CEO of trading firm MNTrading, is one commentator highlighting the significance of $60,000 — despite this level offering little consolation to bulls last week.
“Bitcoin above $60K and retail isn’t here,” he told X followers about the relative lack of fanfare accompanying the market comeback.
“This range is completely fine as long as Bitcoin holds above $60K. Altcoins slowly waking up.”
As Cointelegraph continues to report, $60,000 coincides with several trendlines, which have buoyed BTC/USD since the bull market began in early 2023.
These include the 100-day simple moving average (SMA) and STH realized price — the aggregate cost basis of entities holding coins for 155 days or less.
These two levels sit at $60,650 and $59,920 as of May 6, with the latter figure provided by the statistics resource Look Into Bitcoin.
In a research note on May 6, meanwhile, financial commentator Tedtalksmacro added the 50-day exponential moving average (EMA) to the mix.
“The 50D EMA stands at $64000 – where BTC is currently trading, a reclaim of that level is significant in defining the high timeframe market structure,” he explained.
“Momentum and trend traders pay attention to the 50EMA when navigating the trend.”
More U.S. jobs data casts shadow over dollar
The upcoming week is relatively quiet when it comes to macroeconomic data, but recent events provide traders more than enough to monitor.
The latest United States employment figures gave risk assets a boost across the board late last week — something firmly on the radar for crypto.
With the Federal Reserve increasingly expected to lower interest rates in the coming months, easing of financial conditions is becoming a question of not “if” but “when.”
For Van de Poppe, there is even a chance of quantitative easing (QE) making a reappearance — a return to the Fed increasing available liquidity.
“Very significant chance that most of the pain is already in for Altcoins,” he argued.
“Upcoming week is going to be an interesting one, likely we’ll see some more upwards momentum as Friday showed the way for the Dollar & Bitcoin with terrible economic data. QE is coming soon.”
U.S. dollar strength took a hit on the jobs data, with the U.S. Dollar Index (DXY) declining precipitously to spike to its lowest levels since April 10.
Attention will thus be focused on jobless claims data when it comes to Fed rate cut timing, this due on May 9.
Leverage ignores BTC price rebound
The atmosphere on derivatives markets is noticeably calm as Bitcoin approaches $65,000 — but like sentiment, this could change in an instant.
Current data shows practically neutral funding rates for Bitcoin, which is, per trading suite DecenTrader, a reflection of speculators licking their wounds.
“Bitcoin funding rates have returned to a more neutral state after going negative at the end of last week,” an X post confirmed.
“The dip below $60k spooked a lot of traders before price rebounded.”
Others described funding rates as “still healthy” after witnessing a “massive reset” on the way to $56,500.
“Let’s hope it can stay that way for a healthy next leg up,” Daan Crypto Trades added.
A cursory look at the Crypto Fear and Greed Index provides potential food for thought. Along with the BTC price recovery has come a snapping back of sentiment from “neutral” to “greed,” with “extreme greed” just around the corner.
The Index, which is a lagging indicator, is currently at 71/100, versus just 43/100 on May 2.
Mining difficulty barely due drawdown from record high
$64,000 is not quite enough to allow Bitcoin to avoid a difficulty drop at the next automated readjustment on May 9.
The second readjustment of the new difficulty epoch is currently predicted to see it decrease by around 1.3%, per data from monitoring resource BTC.com.
Difficulty is nonetheless at all-time highs, a feat mimicked by hash rate as miners digest April’s block subsidy halving, raw data from MiningPoolStats confirms.
Last week, Cointelegraph reported on miners’ ongoing resilience, showing no signs of capitulation despite market volatility.
