Bitcoin fell close to the $27,000 level on May 8, indicating that some short-term traders may be booking profits. One of the reasons for the fall was the congestion in the Bitcoin network, which led Binance to halt Bitcoin withdrawals for about an hour on Sunday and roughly three hours on Monday. Binance later said in a tweet that it has taken actions to “prevent a similar recurrence.”
The Bitcoin network congestion was due to a massive surge in unconfirmed transactions. The backlog was caused largely due to heightened activity in minting and transferring of Ordinal inscriptions and BRC20 tokens.
We highlighted in the previous analysis that the indicators were pointing to a range-bound action between $27,000 and $30,000 and that is how it has been for the past few days.
The moving averages are on the verge of a bearish crossover and the relative strength index (RSI) is in the negative territory, indicating that the sellers are trying to gain the upper hand.
A break and close below the $27,000 support will tilt the advantage in favor of the bears. That will open the doors for a possible decline to the crucial support at $25,000. The bulls are expected to defend this level with all their might.
Another possibility is that the price rebounds off $27,000 with strength. If that happens, it will suggest that bulls continue to buy on dips. Buyers will then try to propel the price above the moving averages.
If the price turns down from the 20-day exponential moving average (EMA), it will suggest that bears are trying to gain control.
Contrarily, a break above the moving averages will indicate that the BTC/USD pair may remain stuck inside the $27,000 to $30,000 range for a few more days.
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Enjoy the issue!
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