Bitcoin Cryptocurrency Forecast for May 2022
The Bitcoin 2022 exchange rate has opened quite steadily, despite some movement outside the reference range. We are relatively far from the historical highs reached in 2022, including due to the geopolitical and financial situation, which causes serious concern in the markets. However, March seems to have ended on a high note.
The price movement of BTC. Source: Coinmarketrate.com
Bitcoin is coming out of a very strong March close, which brought it back to much higher price levels. However, at the moment we see a channel between $37,000 and $41,000, which will act as an important support and resistance for the next short-term movements.
But, let’s be more detailed.
The Bitcoin price has reached a critical lower limit, this week will be interesting
According to the data by Coinmarketrate.com in April, Bitcoin dropped even lower. Perhaps the price has touched the bottom of the most important support area. Historically, April has almost always been a very good month for Bitcoin, but this time this trend has been broken. Market sentiment has now become very bearish, but investors hope that in May we will see a trend reversal.
The price of BTC fell by 18% in April. Source: Coinmarketrate.com
The Bitcoin price made another big bounce at $45,000 on April 1 after being rejected at $48k. However, this time, the BTC could not regain the $47,000 mark, and after a few days began to fall rapidly.
Bitcoin also failed to stay above $38,600, and gradually dropped to $38,400. When the price lost momentum here, Bitcoin fell to $37,750, and briefly dropped to $37,600. This is the lowest BTC price in almost two months.
Since then, BTC has recovered a bit and this morning returned to the $38k mark, and even exceeded it. However, this still puts Bitcoin in the negative by 1.5% today, and by as much as 18% compared to a month ago.
Will the “above-below” structure for Bitcoin be preserved?
The latest fall in Bitcoin has almost completely destroyed the recovery of the last two months. Its price has returned to its original position. Although the trend of higher lows since the beginning of the year may still persist, the night before last the price tested the lower part of this trend line.
This border was firmly held in February and March, but it is unclear whether it will hold in the future. There were a lot of accumulations around current prices at the beginning of this year, which should have provided stronger support. However, the fear is even higher now than it was then. And the more often we check this boundary, the weaker it becomes.
The USDIndex DXY chart. Source: TradingView
At the moment, the macro occupies a leading position. If the stock markets reopen in the red tomorrow and the US dollar Index (DXY) continues to rise, it seems likely that Bitcoin will fall even further. In this case, a very bearish scenario should be expected in the short term, and prices at the level of 35,000, 33,000, 30,000 dollars, and even lower cannot be excluded.
Bitcoin still has a “higher high/lower low” structure, but it is also still below the middle line of the Bollinger Band and 55EMA (1W). In general, it is not an ideal option, especially against the background of the ongoing decline in the stock market. But we will soon find out which way everything will be resolved.
Daily trading volume
Daily trading volume is an indicator that measures the total number of BTC involved in transactions on a particular day. When its value increases, it means that more BTC is used in trading operations. This is a sign that the market is becoming positive. However, this is not the only value that exists. Moreover, it is only theoretical.
An On-Chain College analyst reports that a staggering 700,000 BTC have left exchanges since the collapse in March 2020, when the COVID virus broke out in the West. Such an outflow is a very bullish sign in the long run, but in the short term…
For experts, the falling volume may indicate that the market is becoming more inactive. They see the drop as evidence that investors are no longer very interested in this cryptocurrency, in this case in BTC.
Many analysts believe that the downward trend of the BTC exchange rate may end very soon. However, it is worth noting that in the past, low trading volumes were not always used as a basis for justifying large price movements.
In addition, the BTC price recently attempted a rally, but the jump soon faded as the volume did not increase at the same time. Therefore, it is hard to believe that changes will occur in the near future, due to the low trading volume. Such prolonged low volumes are unusual for BTC, and it is difficult to say when high values will return to growth for the cryptocurrency.
Bitcoin is going through one of the most difficult periods of its existence. Its price remains low, refusing to reach high levels, and the volume of trading is also lower than in the past. Although analysts are positive about the future, there are still concerns that the king of cryptocurrencies will continue to lose in price. But there are also factors that push the BTC to grow.