Bitcoin’s meteoric rise in early May, which saw the coin pass the $110,000 threshold, may be showing signs of cracking as its price dips.
Uncertainty related to the US’s tariffs initiative and trade relations with China has fed a growing exhaustion of the recent record prices.
Bitcoin hit a new all-time high of $111,980 on 22 May. It dropped almost 4% the following day, before settling in the range of $106,000-$110,000.
Weakness ahead
Indicators now suggest potential weakness ahead. The Relative Strength Index (RSI)—a measurement of the speed and magnitude of recent price changes— on the daily chart has dropped to 64 from overbought territory (70), signaling fading bullish strength.
Analysts now caution traders from long positions between $109,000-$112,000. Uncertainty in the crypto market is being further fueled by a more cautious economic outlook contained in the recently published minutes of the US Federal Reserve’s May monetary policy meeting.
“Participants noted that the Committee might face difficult trade-offs if inflation proves to be more persistent while outlooks for growth and employment weaken,” minutes from the meeting revealed.
New support level
With Bitcoin hanging just below its all-time high, traders are watching closely to see what happens next. If it can close the day above that high, it could open the door for another leg up, stirring the type of investor confidence that brought Bitcoin above $100,000 in early May, and potentially pushing the price toward $122,000.
That would take about a 12% jump from where it is now – no small move. While the overall mood still leans bullish, there are some signs of hesitation under the surface. The coming days may soon determine where Bitcoin’s new support level, above or below $108,000, may lie.
