Daily Bitcoin Analysis

Daily BTC Analysis

Sunday, May 2, 2021

The beast certainly came to life this weekend as Bitcoin blew through a potentially sticky resistance area at $56,600 and hit the next level of resistance at $58,820 this morning.

So let's dive in and take a look at a few pictures to see if we can piece together the story.

First up, the difficulty adjustment has seen its largest drop since November of last year.

With it now being 'easier' to mine BTC, and the power issue in China resolved, the full force of Bitcoin miners' capabilities are back online and the hash rate is heading back to all-time highs.

So who has been buying Bitcoin this weekend?

Wallets with a balance over 1K BTC have barely budged.

At the other end of the scale, the tiny wallets, with more than 0.01 BTC, have been selling into the rally.

In fact, it's only wallets than hold 1 BTC or more that have seen any kind of uptick.

Which begs the question: Who has taken BTC back up?

The clue is in the funding rate. Having dropped to negative numbers during last week's dip, it's rising again, showing a clear indication that leveraged longs are comfortable and bullish again after the mass liquidation.

We flagged the potential upside squeeze would be on if confidence returned to the market, and it seems that's exactly what happened. After having their positions cut by the auto-liquidation engines, the leveraged crowd is back in force. This could mean that any stall in this rally, and a drop back below $54,200, could lead to another liquidation event.

We have the makings of an interesting week: Failure to see Bitcoin pull back will just force more wounded longs back into the market as they wait to buy the dip that never comes...

Technical Analysis

Bitcoin broke up through the $56,600 level this weekend, with the bulls using the momentum to drive prices to the next level of resistance at $58,820. So far, we have seen a slight pull back as the market looks to create a trading range between $56,600 and $58,820.

A push above $58,820 will lead Bitcoin back to $60,000, with resistance at $61,700 waiting overhead to slow the gains. On the downside, a drop below $56,600 will see the market aim to test support at $54,240.

Market Data

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