Bitcoin must stay above $95,000 to keep the hope of retesting its all-time high of $109,000 alive, say analysts. A failure to hold might lead to deeper corrections, as the market is in a consolidation phase. The upcoming Federal Reserve announcement may further impact Bitcoin’s movement in the coming days. Overall, market sentiment is shifting positively with the fear and greed index indicating an uptick in ‘Greed’.
Bitcoin may be at a crucial point, as it must hold above the $95,000 mark to maintain its chances of reaching its all-time high of $109,000. Analysts have cautioned that failing to stay above this level could result in a substantial correction. The market is currently in a consolidation phase, and this pivotal point represents a lower boundary that has defined the market since the latter part of last year.
Bitfinex reported on May 6 that if Bitcoin can successfully maintain its position above $95,000, it might indicate a significant shift back into a bullish trend. Holding this level would potentially allow for a rally back to its previous highs. The last time Bitcoin peaked at $109,000 was just before the inauguration of former President Trump on January 20. As of now, Bitcoin is trading a bit higher at $96,730, up roughly 3% in the last 24 hours, according to CoinMarketCap.
However, if Bitcoin drops below $95,000, the analysts warn of a troublesome scenario. The area could turn into a resistance instead, increasing the likelihood of a short-term setback and another dip in prices. The coming days are crucial and will determine whether Bitcoin breaks through or faces more bearish pressures based on market reactions.
Crypto analyst Thomas Fahrer highlighted that about $400 million in short positions are at risk if Bitcoin climbs to $98,000. This indicates that while there’s enthusiasm for an upward move, many traders could be caught off guard. Some analysts are maintaining hopes that by June, Bitcoin could hit new heights. For instance, Jamie Coutts from Real Vision even suggested a best-case scenario of $123,000 by that time.
Moreover, there’s speculation around the Federal Reserve’s impending interest rate announcement, which is set for May 7. Historically, such announcements trigger volatility within the crypto markets, influencing Bitcoin’s fate in the near term. Current indicators from CME Group’s FedWatch Tool suggest a slim chance of any rate cuts.
Market sentiment is noticeably shifting towards the positive, reflecting in Bitcoin’s approach to the significant psychological threshold of the $100,000 mark. The Crypto Fear & Greed Index has leapt into the ‘Greed’ zone, scoring 67, up 8 points over the last day, indicating an optimistic outlook among investors.
In conclusion, while some optimism surrounds Bitcoin’s potential climb back to its highs, it hangs on the edge, and a lot hinges on maintaining that critical level of $95,000 amid external economic influences.
