Trend channel formation or increased volatility ahead?

Thought of the week

For some years now, the months of May to July have not necessarily been known for rising prices in digital assets. The famous saying “Sell in May, go away and come back in September” seems to be predestined this year, as the biggest topics (Bitcoin Spot ETFs and Bitcoin Halving) have already been finalised from a media perspective. However, the fundamental strengthening of the market could make altcoins much more interesting in the coming weeks and the “saying” could prove inconclusive this year.

Digital Asset News

Bitcoin shows renewed strength over the weekend, but experts warn that low liquidity offers no security. As data shows, BTC reached an interim high – and also a monthly high for May – of over USD 64,500 over the weekend and on Monday morning.
The strength is most likely due to the strong US labour market figures and an apparent recovery in the crypto market as a whole, including the first net capital inflows into the Grayscale Bitcoin Trust (GBTC) in almost three months.
As a result, the Bitcoin price is up 5% for the month, according to data from CoinGlass. However, this contrasts with losses of 15% in April.
Despite the strong performance at the weekend, market observers remain cautious about the price trend without the involvement of the traditional financial markets.
Keith Alan, co-founder of Material Indicators, points out that there could also be a downturn, as liquidity is very thin at the weekend.
“We are waiting for new liquidity that can underpin this upswing,” as he explains to his followers in this context. He adds:
“Otherwise, it won’t take much to clear this thin liquidity right away.”
Market developments should then be analysed and traded with caution.

Following the almost traditional post-halving downturn, whales have now started buying Bitcoin again, but can they consolidate the crypto market leader above USD 60,000 by the end of the week?
Bitcoin whales, i.e. wallets that hold at least 100 BTC, have recently purchased more than 47,000 BTC, the equivalent of over USD 2.9 billion, as Ki Young Ju, head of the analysis firm CryptoQuant, noted on 3 May:
“Bitcoin whales have bought more than 47,000 BTC in the last 24 hours. We are moving into a new phase.”
Looking at the price chart, he sees two possible scenarios for the further development of BTC in the short term.
“A more relaxed price trend would be ideal. We hold the local high that we recently reached and continue to work our way up towards resistance. This would allow us to enter short positions for several altcoins. A strongly negative trend would again not be ideal. If we don’t manage to recapture this and break back down early, then the conditions for short positions in altcoins would not be met,” he analyses.
This makes it clear once again that the current upswing is not triggering a new wave of “hype”, but represents a normal cyclical upswing.

Twitter co-founder Jack Dorsey announces that his fintech company Block will invest 10% of its gross profit from its Bitcoin financial services in the purchase of BTC every month.
“Going forward, we will invest 10% of our gross profit from Bitcoin services into Bitcoin purchases each month,” Dorsey wrote in a letter to shareholders on 2 May, in which he also mentioned the company’s better-than-expected first quarter results.
“We were one of the first publicly traded companies to add Bitcoin to our balance sheet,” he added. Block purchased $220 million worth of BTC between the fourth quarter of 2020 and the first quarter of 2021.
“Our investment in Bitcoin goes beyond the technology; it’s an investment in a future where economic participation is the norm.”
The company’s latest results show that as of 31 March, Block held 8,038 Bitcoin worth around $573 million, on which it recorded unrealised gains of $233 million.
Block’s Bitcoin gross profit for the first quarter of 2024 from customer sales in the company’s Cash App increased by almost 60% year-on-year to USD 80.1 million. Up to 10% of this amount could be used to buy around 1,350 BTC at the current price of USD 59,250.

Digital Asset Market

Market report including trading idea

The majority of digital assets experienced a slightly negative April, but a fairly positive final week of trading.
During this period of media and emotional cooling of the market, the first setbacks, support cancellations and “realistic” market representations logically followed due to the trend towards lower trading volumes. The Bitcoin Spot ETFs that were launched in Hong Kong were disappointing in terms of volume. The fact that the biggest media topics of the year for the digital asset market have already happened means that a rational and non-media-driven market development can take place in the coming months. This generally helps professional investors who apply defined strategies and trading systems, as we do at Teroxx.
For the week as a whole, the market is up around +3%.
For the coming week, this means that price trends could extend over several days, so the holding period for positions could increase!

Chart technology

From a technical chart perspective, Bitcoin is now in a broad trend channel between $60,000 and $68,000, which has enabled the market to establish support zones and provide many possible entry points across a volatile spectrum. As a result, the trading volume was evenly distributed, making a meaningful representation of the market possible.
The expected setbacks after the halving have materialised and could lead to a longer consolidation phase for Bitcoin, while altcoins could make larger price jumps at the same time if there is fundamental positivity.

The next price targets in the event of a positive development: ~$67,000, ~$69,500, ~$73,000

The next price targets in the event of a negative development: ~$62,000, ~$60,000 ~$57,000

Trading idea

The focus should be on high caps of altcoins in the coming days! There is currently little reason in the media to focus on Bitcoin again and for the third time in just a few months. Altcoins will see increased trading volumes and will always be in the focus of traders due to media coverage.

Weekly overview

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