Traders Still in Search of BTC Floor Price

Last month did not go as planned for the bulls as Bitcoin failed to impress. There were several bullish predictions as to how the apex coin would perform but all failed as price progression was marred by severe market corrections.

One such outlook drew margins from BTC’s previous performance and asserted that April was the most profitable month of the year. As per this conclusion, speculations of the largest cryptocurrency flipping $50k were strong.

The apex coin open at $45,522 and peaked at $47,458. It closed at $37,639, which indicates a more than 17% decline. What caused the change in the upward trajectory that was seen at the start of April?

We observed that there were enough bullish fundamentals in the market during the previous 30-day period. Bitcoin was adopted as a legal tender by another country. Big financial institutions like Goldman Sachs also offered a BTC-backed loan. However, these positive fundamentals could not stop the bears from hurting BTC.

Next, we’ll look at the Fear and Greed Index. We note that at the start of April, the Index was significantly bullish and saw improvement as the days turned into weeks. However, following the first massive correction, it seemed the bulls lost the drive to rally the market.

The last two weeks of the m0nth showed that the metric under consideration displayed extreme fear and was below 30. A few hours to the time of writing, bitcoin flipped the $36k resistance and found support at $35,500. Are we going to see further downtrends?

How Will May Playout for Bitcoin?

The latest drop in price suggests that bitcoin is already down by almost 5% in May. Following the failed speculation last month, we may conclude that price action over the next 25 days is looking more bleak.

However, we will rely on previous records to understand the asset behavior during May. From the chart below, we observed that on an average, the fifth month of the year is bullish as the top coin gains more than 19%.

Since its introduction to the market in 2010, eleven “Mays” have passed. Breaking these periods down, we observed that three of the total timeframes have been bearish. BTC saw its biggest loss last year as it dipped by 34%.

The biggest gain seen was 208%. Going by the margin between losses and profit, coupled with the average, we may draw a conclusion that the month under consideration may be bullish. However, the bears are still in control of the market.

One of these two scenarios will play out:

If bullish, we may expect a rise between 10% – 15% increase.

If bearish, we may expect more. Over the last eleven years, we observed that the accumulated losses during May are gradually rising. For example, in 2013, the apex coin lost 12%. In 2019, it lost 21%, and last year it dropped by more than 34%.

If bitcoin follows the same progression, we may see a dip worth more than 30%. Nonetheless, following normalcy, a drop with 5% – 20% may be seen. Do the charts agree?

Bitcoin Still Bearish on Major Timeframes

Since March, the Moving Average Convergence Divergence (MACD) has shown signs of recovery but failed in the months that followed due to consistent downtrends. Still treading above 0, BTC is bullish on the 1-month chart.

Nonetheless, there is cause for concern as the Relative Strength Index is at 50, and still dipping. This may spell a bad omen for the apex coin as its an indication that we may see more sellers’ congestion.

A more fearful situation is present on the weekly chart as the largest coin by market cap experienced a bearish divergence last week. As per MACD, bitcoin is set to experience more decreases as both EMAs are below 0.

RSI remains the same for the monthly timeframe. The same situation is also felt on the daily chart as almost all indicators are printing bearish signals.

What Could be the BTC Floor Price for May?

Here are the key levels to watch:

Key Support: $34,000

Key Resistance: $37,500, $39,000, $40,500

Bitcoin’s floor price is still unclear as it heavily depends on market sentiment. Currently trading at $36,000, there is no strong support $34,000. As at the time of writing, the $34k support is the gateway between a dip as low as $32k and further price increases. It remains to be seen when the level will be tested.

The bulls will look to rally the market and prevent more retracements. One key support that will serve as a strong bullish barrier after flipping is the $37,500 resistance. A flip of this critical level will result in a possible attempt at $39,000.

Once the $39k resistance is broken, the buyers will look to maintain prices above the mark. More stability above $40k may be seen and the final obstacle ($40,500) further uptrend above $41k will become a support.

Note: The predictions above were derived using the current situation of the market and previous bitcoin performance. This piece should not be construed as financial advice and every trader is advised to do proper research before making any decision.

Source: https://coinfomania.com/bitcoin-price-analysis-traders-are-still-in-search-of-btc-flour-price/#utm_source=rss&%23038;utm_medium=rss&%23038;utm_campaign=bitcoin-price-analysis-traders-are-still-in-search-of-btc-flour-price