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Will Bitcoin’s price of $37,000 support more gains in the short term?
Bitcoin (BTC) prices fell on May 25, wiping out a minor portion of the previous session’s gains after another day of wild trading.
After opening the Asia-Pacific session at $38,856, the Bitcoin/USD exchange rate dropped by 6.11 percent. The pair encountered stiff resistance near its 200-day simple moving average (20-day SMA), prompting the majority of traders to lock in their intraday gains.
As a result, offers for the BTC/USD pair began to fall as the market entered the early London session, ultimately seeking support at a pace that was critical in minimising the market’s bearish trend during the previous week’s price crash.
Rekt Capital, a pseudonymous cryptocurrency investor, referred to the blacked horizontal line in the chart above — approximately $37,000 — as a “key retest” amount, emphasising its importance in evaluating Bitcoin’s short-term market bias.
The analyst placed a blue arrow above the support level pointing north, indicating that he expected BTC/USD to recover in the coming sessions.
“Bitcoin turns $37,000 into support in the short-term,” tweeted Rekt Capital. “But might need to retest that area once again given how strong yesterday’s Daily Close was Still on track for following the blue path.”
The comment came as Bitcoin’s whipsaw pattern persisted, with abrupt intraday reversals of large percentage margins. The choppy market fluctuations reflected traders’ lack of a strong directional bias, especially as analysts weighed equally compelling bearish and bullish catalysts against one another.
Will Bitcoin crash further? The opinions differ
Albright Investment Group manager Victor Dergunov acknowledged that he was buying the Bitcoin price drop, noting that he expects the blockchain to at least cross the $40,000-$42,000 range in the medium term.
“There was enormous volume leading up to and right around $30K, which is what we want to see at the epicenter of the correction process,” Dergunov explained in his note.
“Next, we see a retest attempt, at around $31K, but volume is notably weaker than during the initial drop.”
Offsetting Dergunov’s bullish opinion was portfolio management and analytics firm, the Income Generator. It said the Bitcoin market risked facing the “worst crypto winter” in its twelve-year lifetime, citing the U.S. dollar’s bullish response to rising inflation figures that could sap investors’ appetite for the cryptocurrency.
“It now seems as though rising inflation levels might actually work in the opposite direction and bring renewed buying activity back into the U.S. dollar,” Income Generator said in a note.
Meanwhile, Mike McGlone, the senior commodity strategist at Bloomberg Intelligence, reiterated his bullish stance on Bitcoin, noting that he still sees the BTC/USD exchange rate hitting $100,000 on the prospects of a declining supply rate.
“Bitcoin has backed up for reasons that support an extended bull market and a path to $100K,” he said.
“A bit hot in April, a primary factor cited for the crypto’s correction — excessive energy use — represents the strength of the world’s largest decentralized network, and getting greener.”
McGlone used the term “greener,” to refer to Elon Musk’s plan to form a mining council in North America that would track and subsidise Bitcoin’s carbon pollution.
Over the last few weeks, the Tesla CEO was instrumental in driving bitcoin rates down from $59,000 to as little as $30,000. He condemned bitcoin for its possible environmental effects and stopped using it as payment for Tesla’s electric vehicles.