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09.06.2023 10:10 AM
Sellers increase pressure on BTC: is it worth waiting for a breakdown of $25k?

A month-long lull in the accumulation and consolidation movement of the BTC price ended with a sharp surge in volatility. In just a few days, the price of Bitcoin experienced bullish and bearish breakouts beyond the usual range of fluctuations. The initiators of impulsive price movements have always been sellers who provoked the reaction of the bulls.

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To a large extent, the buyers' reaction was symmetrical and sufficient to protect key levels. However, with trading volumes below the $30 billion level, it is difficult for the bulls to achieve a full trend reversal. Macroeconomic news also does not add positivity, creating an atmosphere of anxious uncertainty in the market.

Fundamental Factors

Let's divert our attention from what is happening overseas and return to the Eurozone, where inflation recently reached levels seen at the beginning of 2022. The hawkish policy of the ECB has yielded results but significantly undermined the economy's capabilities. According to data from Eurostat, the Eurozone entered a recession in the first quarter, and GDP has been declining for two consecutive quarters.

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The situation in the U.S. remains challenging as well, as the forecasts published on Thursday regarding the expected level of consumer prices in May stood at 4.2% compared to 4.9% in April. This indicates the likelihood of accelerating the pace of inflation decline to -0.7%, which adds optimism to investors.

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At the same time, the published data on the number of initial jobless claims does not inspire optimism. The figure rose to 261,000, while for several months, the statistics did not exceed the 240,000 mark. On the one hand, this is an additional restraining factor for raising the Fed's interest rate, but on the other hand, it becomes evident that the regulator is losing its only method of combating inflation.

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The battle between the SEC and the largest cryptocurrency exchanges continues, with a total loss of around $2 billion in user fund outflows. Additionally, Binance U.S. has stopped accepting U.S. dollars following the SEC's lawsuit, further undermining trust in centralized exchanges.

BTC/USD Analysis

Investors are actively reacting to negative events in the cryptocurrency market. It is reported that over the past month and a half, practically all categories of addresses have significantly increased their BTC holdings, with some groups reaching absolute highs. In total, traders and investors have withdrawn over 15,000 BTC from cryptocurrency exchanges over the past 1.5 months.

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At the same time, analysts from several leading on-chain resources note that after the consolidation period, selling pressure has significantly increased. As of June 9, bears are dominating the cryptocurrency market, forcing buyers to react.

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However, it cannot be claimed that bears have complete control over the BTC market. The recent buyers' reaction, which led to a "bullish engulfing" formation in Bitcoin, demonstrates the potential for an upward movement. However, at this stage, external factors and market sentiment do not provide bulls with the opportunity to realize an upward impulse.

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The BTC/USD price is moving near the $26.6k level and attempting to return to the consolidation range of $26.6k–$27.5k. At this stage, sellers manage to hold the support level at $26.6k, which opens up the possibility for bears to push the price lower towards $25.5k. On the other hand, buyers need to enter the $26.6k–$27.5k range to continue the upward movement towards $28k.

Conclusion

The market is once again experiencing a calm period with a slight advantage for sellers, who are keeping the price within their desired range. Trading activity will likely decrease even further over the weekend, and more active price movement will be observed in anticipation of the Federal Reserve meeting and inflation data, where each side will attempt to implement their plans.

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