Bitcoin is about to close its tenth weekly red candle. This is a dangerous situation for bulls as it can trigger liquidation. According to Kevin Svenson, a crypto analyst, a substantial rise could cause the price to break out of its current trading range.
According to TradingView, Bitcoin is currently around the May 30 opening level. However, before the weekly candle closes, it is still possible that the price could fall back to around $29,450. If it closes below this level, it will be the first time a cryptocurrency has gone through continuous red weeks. On the other hand, investors have mixed opinions about the potential price movement.
A popular Twitter account known as Crypto Santa noted that the market is still in its early stages of inflation. However, it is still expected that Bitcoin will close above $28.5k this week. This could trigger more price action changes in the coming week.
"The jury is still out in terms of inflationary trajectory," Crypto Santa tweeted. "BTC is likely to achieve a Weekly close above $28.5k, meaning more PA changes for the week ahead."
The price of Bitcoin remained in a tight range throughout the week. On the other hand, Crypto Santa noted that the upcoming U.S. inflation data could trigger volatility. This could be because the consumer price index for May is expected to come in above the high expectations.
Very hard to tell, again all about daily trend and the recent highs put @ 32k.— Pierre (@pierre_crypt0) June 4, 2022
Gaps above big enough to be interesting to play even > 32.
A close like this for the weekly would be pretty... Indecisive.
For example if you see it that way.. story isn't the same 🙂 pic.twitter.com/pYRxvEArjJ
Watch out for unforeseen inflation rates
According to Jeffrey Rosenberg, a senior portfolio manager at asset management firm Blackrock, the Fed is still not able to get its hands on the inflation target. Rosenberg noted that until the central bank can start seeing signs of a sustainable reduction in inflation, it will be challenging for them to raise interest rates.
"The jury is still out in terms of inflationary trajectory," Rosenberg said. "You really can't get the Fed off the job of focusing on priority number one—reducing inflation—until you start to see that come through for sure. Until that happens, it will be a very difficult time."
In April, the consumer price index peaked at 8.3%, which is the highest level since the early 1980s.
Despite the lack of positive news, a group of traders continued to take long positions in Bitcoin. On the Bitfinex platform, long positions increased, hitting new record highs. This sudden rise in the number of positions has raised concerns about the potential impact of a liquidation event on the market.
On June 2, Kevin Svenson warned that Bitcoin could be in for a liquidation disaster. He noted that the sudden increase in long positions could trigger a massive pump and dump.
Current market price action
Bitcoin's weekly candle is still green despite the lack of positive news. It is exciting to see if the price will finally close above the $29,000 mark, following a nine-week losing streak. For this to happen, the price of Bitcoin needs to close above $29,468 during the trading session on Sunday.
The market is still very volatile, with some altcoins performing well while others are struggling. For instance, Cardano is one of the most prominent outliers, with its price rising by around 13% during the past week. On the other hand, Solana is the biggest loser, with its price dropping by approximately 12.5% during the same period. This could be because of the network's ongoing issues.
For the week, the total market cap of cryptocurrencies increased by around $30 billion. Dogecoin gained 2.5% despite the volatility, while Ethereum dipped 2.4%.
Bitcoin's dominance continued to increase, with its market cap increasing by 0.5%. This metric shows that Bitcoin performed better than altcoins.