Bitcoin's recent performance has been marked by significant volatility, with the cryptocurrency's test support level at $56,500. This test of support sparked discussion about the likelihood of Bitcoin reaching the $70,000 target price. An important event that affected Bitcoin market dynamics was the recent Bitcoin halving that took place on May 20th. This is the third halving for Bitcoin, with miners' rewards decreasing from 6.25 BTC to 3.125 BTC. This adjustment has an immediate impact on the supply and demand dynamics within the Bitcoin market, as it affects the rate at which new Bitcoins are put into circulation.
Market sentiment and potential catalysts
Despite the prevailing bearish sentiment, Bitcoin bulls are actively working to regain momentum by pushing the price above the psychologically important level of $60,000. In particular, veteran trader Peter Brandt highlighted the possibility of a classic bull market continuation pattern if Bitcoin maintains its recent lows and continues its upward trajectory. In parallel, we can see that Bitcoin's open interest has increased by over 6.45% and its valuation has skyrocketed to $16.5 billion. The RSI indicating a bearish forecast is 67.12, which correlates with the recent 6.29% increase in Bitcoin price, trading at $63,289.
Additionally, market participants have been closely monitoring spot Bitcoin exchange-traded funds (ETFs), which recently witnessed significant outflows amounting to $563 million on May 1st. However, sentiment could change if Bitcoin ETFs start seeing net inflows on a daily basis. Former BitMEX CEO Arthur Hayes expressed optimism, suggesting the recent selloff may be over and could signal a return to the crypto market's rise. .
Also read: Crypto prices today, May 4th: Bitcoin rises above $63,000 as ETF inflows regain momentum
Bitcoin price predictions and important considerations
When analyzing potential price movements, attention is drawn to the liquidation chart, which shows the potential for a large liquidation of over $1.19 billion if BTC price crosses certain key levels.
However, a closer look at past accumulation trends can provide further insight, as highlighted in IntoTheBlock's Money In/Out chart. This chart identifies a historical accumulation zone between $61,770 and $63,583 and shows a notable number of addresses acquiring his BTC within this price range.
This accumulation suggests fundamental support for Bitcoin price at these levels. Nevertheless, if the resistance cannot be overcome, the price could fall towards $55,500. Current BTC price predictions suggest a possible recovery towards $70,000, with further upward trend supported by new bullish momentum in the Relative Strength Index (RSI) . However, caution is advised as profit-taking could occur at key levels such as $66,000 and $68,000, which could dampen the upward momentum towards the final target of $70,000.
Also read: Grayscale Bitcoin ETF ends 77-day outflows as GBTC inflows begin
