A bullish reversal into the new week is quickly gaining attention, but sober analysts are predicting it will just be another bounce.
Bitcoin (BTC) is rebounding this week as a sudden surge challenges weekly highs.
BTC/USD returned to weekly highs on May 30 and gained a few percent overnight, which should give the bulls much needed confidence.
Unlike the last weekly closes, the May 29 candle managed to contain and reverse the decline after the start of the new week.
However, Bitcoin has now sealed nine consecutive weekly red candles, which has never happened before in its history.
How bearish will the biggest cryptocurrency be in June? The macro environment remains turbulent, retail interest is virtually non-existent, and calls for deeper capitulation persist.
However, if it maintains its recent strength, there is still a chance for Bitcoin to break out of its current trading range.
Cointelegraph explores the factors that will influence the market in the coming days.
Can Bitcoin avoid 10 weeks of red?
Bitcoin breaks tradition this week with an unexpected but welcome twist on the night of May 30th.
Asian deals have provided the backdrop for solid gains, with Japan’s Nikkei and Hong Kong’s Hang Seng up more than 2% at the time of writing. This was prompted by news that China plans to ease some of its recent COVID-19 restrictions and open up the economy.
However, Bitcoin outperformed equities ahead of European trade.
After the first hourly red candle after the close of the week, BTC/USD rose from $29,300 to current levels of around $30,700, according to data from Cointelegraph Markets Pro and TradingView.
Weekly candlestick chart BTC/USD (Bitstamp). Source: Trade review
While the week’s close remains red, Bitcoin could end its nine-week losing streak this week if next week’s close is at least $29,500.
For some, one action was enough to become noticeably more positive in the short term.
“Bitcoin is on the cusp of a mega bullish signal,” Jordan Lindsey, founder of JCL Capital, told his Twitter followers:
“In my opinion, now is not the time to be greedy for earthen mites.”
Crypto trader Tony noted that Bitcoin is still in a familiar trading range and needs to clear several key levels before it is considered to have a sustainable trajectory. For him, that’s $31,000, not far off.
Others have focused on the idea that the current rally is just another upswing and that Bitcoin should bounce down after that.
The popular TMV Crypto trading account, meanwhile, has noted overnight lows as key support for moving forward.
“I’m not sure we need to be very optimistic about BTC+ETH here,” added fellow analyst Crypto Ed in a Twitter thread posted on May 30.
He pointed to low volume over the weekend supporting the recovery, suggesting that higher levels have yet to attract the buying interest needed to strengthen as new support.
“I saw some positions disappear in my feed, which was understandable when I saw weaknesses in the charts,” he continued:
“Once again, a good example of caution over the weekend. Too often you play with tight orders, so I prefer not to open new positions on weekends.
Meanwhile, the CME futures gap, which has remained at $29,000 since May 27, represents another bearish target.
CME bitcoin futures hourly candlestick chart. Source: Trade review
Analyst: stock rally is a bear market rally
As the US markets are closed for the May 30 holiday, Europe and Asia set the tone for the day.
And with the start of the World Economic Forum, cryptocurrency holders can breathe a sigh of relief ahead of the next Federal Reserve meeting in mid-June.
Asian stocks rebounded after an eight-week drop, becoming the main macro focus of the day.
Having failed to capitalize on a similar rally in the US last week, bitcoin now appears to be capitalizing on the sentiment that commentators have been warning about but are most likely not indicative of a general trend reversal.
The tightening of monetary policy by the Fed and other central banks not only pissed off stock traders, but also sparked talk of a deep recession that the economy would pay for.
“We are in the middle of a bear market rally”