Bitcoin Attempts Breakout! Weekly Analysis, ETFs, Key Levels, and What to Expect from the Fed (May)

Bitcoin Attempts Breakout! Weekly Analysis, ETFs, Key Levels, and What to Expect from the Fed (May)

Bitcoin has made a significant leap, exciting the crypto market! We are facing a crucial weekly close that could define the next steps for the price. But does this rally have the strength to continue? What are the technical signals, the drivers behind the move, and the risks on the horizon?

In this analysis, we'll dive deep into the current context: BTC's fight against important resistances, the role of ETFs, revealing on-chain data, the liquidity scenario, and the decisive week of macroeconomic data ahead, including the Fed meeting. Stay tuned to understand the possible scenarios and how to prepare! And if you like the content, you know the drill!

The Decisive Weekly Candle: Can BTC Break Resistance?

Bitcoin's weekly chart shows a clear attempt to overcome a significant downtrend line (DTL) that has been pressuring the price.

Technical Analysis: The Battle Against the Downtrend Line

The current weekly candle (green and robust so far) is trying to close above this DTL. A confirmed close above this level would be a very positive technical signal, indicating potential for further highs. On the daily chart, the battle is still ongoing near this line.

The Positive Signal: Breaking the "Bull Market Band"

An encouraging point on the daily chart was the break and hold (for now) above the upper "bull market band," an area that previously acted as resistance. This demonstrates short-term buying strength.

The Fuel for the Rally: The Triumphant Return of ETFs?

The main driver behind this recent recovery seems to be the return of positive flows into spot Bitcoin ETFs.

Billions Return: The Impact of ETF Flows on Price

After a period of significant outflows (some of the largest since the ETF launch in early 2024), we've seen a clear reversal. In recent days, net inflows of hundreds of millions (reaching nearly $1 billion in a single day) have been recorded again. These green bars of positive flow are a strong indicator of institutional and retail demand via ETFs.

The "Retail" Dynamics: Buying the Top Again?

As mentioned in previous analyses, it seems that some of the flow that exited during the dips (selling the bottom) is now returning (buying higher). The continuation of these positive ETF flows will be crucial to sustain the current rally.

On-Chain and Liquidity: Warning Signs and Confirmation

Beyond price and ETFs, what do blockchain data and the liquidity scenario tell us?

Testing the Short-Term Holder (STH) Realized Price: Support or Resistance?

An important on-chain indicator is the "STH Realized Price" – the average acquisition cost of Bitcoins held by short-term holders. Historically:

• Breaking and holding ABOVE this line: Signals strength and continuation of the rally (as seen in 2023 and 2024).

• Being REJECTED by this line: Indicates weakness and potential for further drops (as seen in previous tests). Currently, Bitcoin is testing this line from below. It is crucial that the price manages to establish itself above it to validate the strength of the move. A rejection here would be a warning sign.

The End of the "Hidden Stimulus": Tighter Liquidity Conditions

Overall market liquidity, which was boosted by the Fed's "hidden stimulus" (via TGA, etc.) in 2023 and early 2024, is now more restricted. This "hiding stimulus" has dried up, making the current environment more dependent on new liquidity injections or a change in the Fed's official monetary policy. The upcoming meeting is key in this regard.

Price Scenarios: What to Expect Short-Term? ($70k to $106k?)

Based on technical and on-chain analysis, how can we prepare for the next moves? (Note: Prices mentioned are based on the original source).

Optimistic Scenario: Breakout Confirmed and Aiming for New Highs

• Confirmation: Weekly close above the DTL (~$93k-$94k).

• Next Target: If confirmed, the sideways range could shift higher, between $96k and $106k, driven by continued ETF flows.

Rejection Scenario: Crucial Support Levels

• Ideal: If rejected at the DTL, hold support at $91k and try to break again.

• Acceptable: Pull back to the $86k - $84k range (former resistance, now support) and resume the uptrend.

• Important: Hold above the STH Realized Price.

The Risk of a Deeper Drop: Revisiting $74k or the Dreaded $70k?

• Concerning: Losing $84k support opens the door to retesting previous lows at $74k-$75k (forming a double bottom, which could still be positive).

• Possible (Worst Short-Term Case): Target the high liquidity zone around $70k.

The Red Line: Below $64k, Alarm Bells Ring

• Maximum Alert: Losing the $64k level would indicate a significant structure break, greatly increasing the chances of a prolonged bear market scenario. Down to $70k, the larger cycle's bullish structure might still be considered intact by many analysts.

The Key Week Ahead: Fed and Macro Data Will Set the Pace

The upcoming week (end of April / beginning of May) is extremely important for setting the market mood.

Fed Meeting (May 7th): Expectations and Liquidity Impact

The Fed's decision and, crucially, its communication regarding interest rates and the future of QT are critical. Any dovish signal could boost the market. A hawkish stance could weigh negatively.

Data Avalanche: Confidence, Jobs, GDP, and the Crucial PCE (Inflation)

• Consumer Confidence (Tue): May indicate consumer spending strength.

• JOLTS (Tue) & Jobs Report (Apr): Will show labor market health.

• GDP Data: Will confirm economic (de)acceleration.

• PCE (Inflation - Wed): Most important data point of the week. If it comes in controlled (as Breakeven Inflation suggests), it increases the odds of the Fed cutting rates.

Corporate Earnings: Stock Market Contagion

Results from 25% of S&P 500 companies will be released. Strong earnings could cheer Wall Street and positively spill over into Bitcoin.

Long-Term Vision: Why Liquidity Still Rules the Game

Despite short-term volatility, the long-term outlook, based on global liquidity cycles, remains optimistic for many.

The Liquidity Cycle (M2) and Bitcoin's Potential ($150k-$190k?)

Indicators like M2 (global money supply) continue strong expansion. Historically, Bitcoin's price follows this liquidity. Models based on M2 suggest potentially much higher targets for BTC in this cycle (perhaps $150k-$170k, with the model even pointing to $190k). Remember: the path there is made of waves.

The Favorable Macro Context (US Debt)

The unsustainable fiscal situation in the US (interest payments on debt exceeding defense spending) creates a structural need for policies that, in the long run, could devalue the dollar and benefit scarce assets like Bitcoin.

Strategy: Riding the Full Cycle with Preparation (DCA, Cash)

The philosophy is: don't try to guess the bottom or the top. Be prepared for different scenarios with a clear strategy:

• DCA: Keep accumulating in good projects.

• Cash: Maintain liquidity to seize opportunities.

• Portfolio Management: Rebalance as needed.

• Cycle Focus: Don't get scared by corrections, aim for the full cycle potential.

Conclusion: Prepared for Anything, Focused on the Cycle

Bitcoin is at a decisive short-term moment. The weekly close, ETF flows, and the upcoming avalanche of macro data, culminating in the Fed meeting, will bring volatility and define the direction. Be prepared for a breakout or a rejection, managing your risk.

However, don't lose sight of the bigger picture. Global liquidity cycles continue to point upwards in the long term. Maintaining strategy, patience, and a focus on fundamentals is key to riding the full cycle and seeking significant appreciation.

Want to closely follow the developments of this crucial week and the best strategies? Stay tuned here on the site and don't miss our next analyses!