After Bitcoin was swayed away with a bearish roar for more than a week, the flagship currency is now entering a recovery phase. Yesterday, on May 12th, the cryptocurrency market had one of the worst bearish cycles of 2022 as the world’s first crypto by market cap, dropped around $26,000.
However, today the Bitcoin price has crossed $30,000 where the currency is trading at $30,695 with an increase of 13% over the past 24hrs.
Bitcoin Is Still Under Pressure
When Bitcoin’s all-time high of $69,000 is considered, the currency crashed by 61% when Bitcoin hit $26,591 yesterday. This immense crash was seen after the flagship currency started its bearish trend on May 5.
If Bitcoin continues this pattern then the currency could see a 52% crash pulling the price towards $17,803 and there are a few technicals that point towards the same price action.
The above chart includes volume profiles for 2020, 2021, and 2022. The most interesting one is during 2020 and 2021. This volume indicator shows that barely-there was any trading of any volume as Bitcoin had spiked 556% between September 7, 2020, and April 12, 2020.
This kind of zero volume or void volume in trading happens when the price action is between $11,891 and $29,424. Due to the aggressive nature of the crypto market, the Bitcoin price surged massively, surpassing all the inefficiencies.
From this data, we can assume that amidst the ongoing crash, Bitcoin could bottom at $11,891 if there is an extremely alarming situation. However, if the volume indicator between 2019 to 2022 is considered, Bitcoin’s first support lies at $19,500, and $11,891 will serve as a macro bottom. Also, many investors are of the opinion that Bitcoin will stabilize around this level.
On the other hand, though the higher frame technicals suggest a crash, the technicals of the lower time frame point towards a minor price rally.
Bitcoin Price Rally Is Temporary!
The Bitcoin CME data (Chicago Mercantile Exchange) indicates multiple level price action gaps. These voids can be seen forming during the weekends when the CME closes its trade while the crypto market continues.
Now as the Bitcoin price has entered the recovery zone, if the currency maintains its bullish trend, there is a high possibility that the rally could fill up the gaps. Also, there was a flip of resistance level by macro support at $34,752 and hence, the upper trend resistance is around $35,000.
However, though the present scenario of Bitcoin price looks positive, the volume indicator and the CME data suggest a further crash in Bitcoin price, alerting the investors to be cautious.