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Abstract: Bitcoin prices have risen by nearly 3% since Tuesday. With Bank of America in trouble and anxiety, the price climbed above US$28,600.

Fundamentals

In the past 24 hours, the market value of cryptocurrency has increased by 1.4% to US$1.18 trillion.

The sentiment in the market over the past few days has been erratic for traders in encrypted assets. Bitcoin prices fell to the US$27,000 support line and then returned to US$30,000, then reversed again.

On Tuesday, Bitcoin rallied to US$28,600, more than half of the previous day's decline. Bitcoin and gold prices gained momentum amid the re-emergence of regional banks in distress. This time it was PacWest Bancorp, Western Alliance, and Metropolitan. However, we also noted that Bitcoin prices had stabilized before the news, indicating that the selling momentum may have subsided.

Meanwhile, technically, Bitcoin has steadily recovered above its 50-day SMA, suggesting further declines are not supported. The Fed's interest rate resolution, originally scheduled to be released today, is expected to increase volatility later. Based on Bitcoin's current price (US$28,600), a closing price below or above the 50-day SMA could determine the direction for days or weeks to come.

On the industry side, investment in encryption funds fell by US$72 million last week for the second week in a row, according to CoinShares. Bitcoin investment fell by US$46 million and Ethereum investment by US$19 million (the largest outflow since September 2022).

Bitcoin transactions reached an all-time high in December 2017 due to a surge in activity associated with the Ordinals project, enabling the NFT to be issued on the BTC blockchain.

Glassnode points out that the main factor behind the pause in Bitcoin's rally is that "new investors" have sold nearly US$30,000. Rumors about Mt. Gox customers and unconfirmed sales will only exacerbate the volatility.

MicroStrategy's first-quarter net profit was US$461.2 million. MicroStrategy increased its long position from 7500 BTC to 140000 BTC. "Our faith in Bitcoin strategy remains firm," the press release said.

Market observation: Some regional banks are still struggling. If the banking crisis continues, there will be room for further growth of encrypted assets. This is similar to the banking crisis in the first quarter when the price of Bitcoin was "decoupled from the U.S. stock market" and rose by nearly 40%.

In addition, the indicator of Net Unrealized Profit/Loss (NUPL) shows that only 30% of the market value is currently profitable. The existence of this indicator in the optimistic region further shows that nearly 70% of the market value has not yet realized the income; Therefore, Bitcoin has more rising prospects.

However, the lack of regulatory clarity remains a problem as it is clearly driving investors away from the asset.

Technical Analysis

At present, the bulls are willing to challenge the low of US$30,000 in 2021 after breaking through the resistance of US$28,500 to consolidate. Despite fluctuations in Bitcoin prices, bulls are still targeting US$35,500.

Still, there are signs of weak demand near the critical US$30,000 level. Investors are worried that prices will fall after today's Fed decision because they need to reduce risk.

So far, Bitcoin price remains supported by a favorable ascending channel (lower band), while it could trigger a reversal if the short-term resistance at US$30,000 continues to squeeze the upward momentum. However, structurally, the trend remains upward. It is recommended to buy at the lows.

Trading Recommendations

Trading direction: Long

Entry price: 26000

Target price: 35500

Stop loss: 22500

Deadline: 2022-05-17 23:55:00

Support: 28220, 27645, 26945

Resistance: 28893, 29023, 30426