Bitcoin Risks ‘New Lows’ In Monthly Close As BTC Price Retests $27,000

Bitcoin (BTC) tested $27,000 on May 31 as weakness prevailed in the monthly close.

Analyst: Bitcoin Reaching “Critical Territory”

Data from Cointelegraph Markets Pro and TradingView tracked BTC/USD as it continued to lose momentum after local highs near USD 28,500.

As the excitement died down early in the week, traders and analysts warned that this was a make or break point for the short-term trend.

“Critical territory is approaching here for Bitcoin and diving in,” says Michaël van de Poppe, founder and CEO of trading firm Eight, In summary.

“If this zone continues as support and Bitcoin will be able to reclaim $27,500, everything looks like we will continue the uptrend. Drop below $26,600 and we will see new lows.”

Trader Skew added that liquidity from the spot purchases on the largest global exchange Binance had been taken, with a reversal now needed to avoid a retest of the 200-week moving average (MA).

This had functioned as previous support and was at just over $26,000.

$BTC Binance spot
and walls filled now lol

power is what you want to see right now otherwise straight back to 200W MA pic.twitter.com/D2XsU6mrk8

— Slant Δ (@52kskew) May 31, 2023

Oblique noted further that BTC/USD was testing several exponential MAs that day in a “pretty significant” performance.

Moving on from the Binance order book, Monitoring Resource Material Indicators had some predictions on how the monthly close might play out.

“For the most part, Bitcoin’s liquidity changes in the order book have been quite subtle today, but by zooming out a little further, we can see that the demand liquid from the $31,000 – $32,000 range is moving closer to the active trading zone as the bid liquidity has scaled down and then adjusted slightly,” it said told Twitter followers.

“Liquidity consolidating in the range should dampen volatility towards the monthly close. The bigger concern for bulls is that bid liquidity is thinning out.”

Liquidity poised to fuel Bitcoin’s fire

While popular analyst Philip Swift offered some hope in the event of an upward return, he noted that liquidity above $30,000 was lurking.

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Swift, the creator of the on-chain analytics site LookIntoBitcoin and co-founder of the trading suite Decentrader, suggested that any breakout could gain “momentum” and potentially lead to $35,000.

“*IF* Bitcoin could go up to $31,000 (it should overcome the $30,000 weekly resistance) there is a large amount of liquidity between $31,000 – $35,000 that could add some momentum to the move,” he noticed.

An accompanying chart showed Decentrader’s Liquidity Map tool.

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This article does not contain any investment advice or recommendations. Every investment and trading move involves risk and readers should do their own research when making a decision.