Bitcoin (BTC) reached a price of $65,000 in the early Asian trading session on May 6, finding support at the 50-day exponential moving average (EMA). According to data from Cointelegraph Markets Pro and TradingView, the BTC/USD pair rebounded from lows of $63,340 on May 6, rising 3.45% to an intraday high of $65,523.
BTC is currently about 15% higher than its two-month low of $56,500, which was reached last week on May 1. This increase in price came as concerns over the stagflation of the U.S. economy caused investors to adopt a risk-off approach.
Bitcoin’s recovery resulted in a bullish weekly candle, prompting Bitcoin funding rates to return to a more neutral state. Market intelligence platform DecenTrader stated in a post on May 6 that the funding rates had previously turned negative.
Data from Coinglass also supports this observation, showing that Bitcoin’s funding rates on exchanges have now returned to a neutral state after being negative last week. Negative funding rates are typically seen as bearish indicators, while a neutral funding rate indicates a reset in trader positions, reflecting mixed sentiment in the market.
However, if Bitcoin were to decline from its current levels, key support levels would come into play. Independent trader Ali Martinez identifies the $57,000 to $64,000 demand level, embraced by the 50-day EMA, as a prime buy zone for BTC.
Martinez shared a chart from Glassnode, which shows that Bitcoin’s recent drawdown caused the MVRV ratio to drop below its 90-day moving average. According to Martinez, when the MVRV dips below the 90-day average, it signals a buying opportunity. Despite Bitcoin’s recent climb above $60,000, the Bitcoin MVRV Momentum still satisfies this condition, making it an ideal entry point for investors.
During the market’s drawdown last week, Bitcoin whales took advantage of the prime buy zone and bought more BTC at discounted prices, according to on-chain data provider IntoTheBlock. The firm noted that addresses holding more than 1,000 BTC have been accumulating strongly in recent months. However, the accumulation has been dwindling as each period of accumulation is followed by a price increase.
While this may indicate that large investors have less appetite to buy the dip, it is still a positive sign as continued accumulation suggests bullish sentiment among this group of investors.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.