Bitcoin (BTC) held firm at $29,000 as Wall Street opened on May 27, as a key support level was just a few hundred dollars away from the spot price.
BTC/USD 1-day candlestick chart (Bitstamp) Source: TradingView
Traders call for lows above $28,000
Data from Cointelegraph Markets Pro and TradingView confirms that volatility has subsided again amid a dismal week of price action.
BTC/USD found itself in a narrow channel on the day, and for Cointelegraph contributor Michaël van de Poppe, it doesn't take much deviation to break the status quo.
“Technically, in terms of Bitcoin, you would obviously like to see a higher low happen, and if we do happen, we could start to see a continuation,” he said in a recent YouTube update.
Levels to hold on to now are nearby - $28,600 and $28,200, to avoid hitting this week's low of $28,000 again and potentially giving up the chance to build higher or lower.
“If that is lost, then I would expect myself to be at $26,000 because then we will start to move further down,” he concluded.
Equally wary was commentator Bob Loukas, who watched the Bollinger Bands volatility indicator during the day to warn of possible turmoil.
On social media, widespread belief that cryptocurrency capitulation is imminent has been the dominant sentiment in recent weeks.
Profitable supply favors bears
At the same time, looking at the entire network as a whole raises concerns that current prices are unaffordable.
When analyzing supply as a percentage of profit, Kripto Mevsimi, a contributing analyst at on-chain analytics platform CryptoQuant, came to a bearish conclusion.
Currently, about 55% of the supply is profitable, and there should be more price capitulation than historical behavior to provide some assurance of a macro bottom, he explained.
First, however, BTC/USD should have a sideways period before finally falling. This would make the current price performance consistent with the 2018 bear market and the March 2020 crash.
“Next; 2-3 months of tedious price action. Then a final capitulation could result in an additional 30%-50% price drop,” he concluded.
The accompanying chart compares the three stages from the 2017 high of $20,000.
Bitcoin Supply in Profit vs BTC/USD Annotated Chart Source: CryptoQuant
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