Bitcoin’s price is hovering inside a range that indicates that some sort of stability is back in the markets. However, this might not be for long as BTC is looking to sweep the lows on a macro time frame and on a lower time frame. Until these events transpire, the chances of an uptrend are highly unlikely.
Bitcoin price ready for a quick run-up
Bitcoin price on the 1-hour chart shows a range formation, extending from $29,700 to $32,652. This development indicates that the buyers and sellers are equally matched. Moreover, rangebound movements are easy to predict and trade.
The asset usually sweeps one of the extremes which is followed by a recovery above/below that range. After a successful recovery, the asset targets the range’s other extreme for a sweep.
With Bitcoin price, the range low at $29,700 is likely to be swept first, which will be followed by a rally toward the range high at $32,652.
Further supporting this uptrend is Bitcoin’s price action from a higher time of 1-day. BTC has set up two distinctive lower lows on 22 January and 11 May, while the relative strength index has created higher lows, revealing a divergence.
This technical formation is referred to as the bullish divergence and is often followed by a spike in the asset’s price. Therefore, interested investors have a double confirmation signal that the Bitcoin price is ready for a quick run-up.
While the technicals are printing a bullish signal without a doubt, this development comes at a time when the market and its participants are filled with massive uncertainty and fear. To add to their woes, the wallets holding between 10,000 and 100,000 BTC are also showing mixed signals.
From 2 May to 6 May, these market participants bought the dip and increased their numbers from 83 to 89. However, this number dwindled to 84 in the next five days, suggesting that these investors were unsure about their purchase.
To make things interesting, the same investors have bought the dip and pushed their number back to 88, where it currently stands.
Therefore, market participants trading BTC need to exercise the utmost caution due to the current conditions of the crypto ecosystem.