What to know:
- Bitcoin shows mild gains as volume drops, signaling cautious market participation.
- The analyst sees wave B forming, with a potential move toward the key $87K retracement level.
- BTC trades below the 200-day EMA, while Bollinger Bands signal a near-term resistance zone.
Bitcoin (BTC) recorded a slight increase over the past day as market activity showed mixed signals, on Monday, May 4. Price moved higher, while trading volume weakened. This points to cautious participation among traders.
According to CoinMarketCap data, Bitcoin is trading at $78,723, showing an increase of 0.43% in the past 24 hours. The trading volume has dropped 8.39% to $17.53 billion. Over the last seven days, the token has posted an increase of 0.61%.
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Bitcoin Wave B Structure Develops
In a post on X, analyst Darkfost highlighted that Bitcoin is still in a wider corrective period. Wave A is already established, and the current structure is heading to a developing wave B. This stage is anticipated to develop in five legs prior to a potential final wave C.
The analyst further noted that the situation might change with alteration in price action. For now, this remains the preferred outlook. The focus has shifted to the daily time frame where Bitcoin is approaching a short-term decision zone that may determine its next action.
The analyst pointed out the probability of a move to $87,000, which is equal to a 50% retracement of wave A. Short positioning in the market can support this move, pushing the price to that level.
Nevertheless, Bitcoin might have to take a break following such an action. A more pronounced trend reversal would be a weekly close of more than $93,500. Until this, the market is going through a corrective stage with a hesitant trend.
Bitcoin Faces Key EMA Resistance
BTC is currently trading lower than its 200-day EMA, which is currently at $82,127. The level is a major resistance and at the same time indicates the pressure that persists in the larger trend. It would need a sustained upward movement to ascertain a more solid bullish movement.
Short-term EMA levels show the 20-day EMA at $76,324 and the 50-day EMA at $74,219. The 100-day EMA is positioned at $75,805. These levels are not yet reached, which means that there is a certain amount of short-term strength since Bitcoin manages to maintain the current levels.
The EMA formation indicates a slow recovery without a definite breakout. The overhead resistance is reflected by the distance between the 200-day EMAs. Traders are considering whether or not Bitcoin could continue to hold a higher position than shorter-term averages.
Bollinger Bands data shows the upper band at $79,714, the middle band at $76,734, and the lower band at $73,755. Bitcoin is currently trading at the upper band, which points to a short-term strength but also depicts a possible resistance zone.
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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