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Abstract: Bitcoin has been under selling pressure for the eighth consecutive week and continues to try to stay within the strong support area of US$26,500. The market value of cryptocurrency is still close to US$1.127 trillion due to the selling pressure of nearly US$1.14 trillion in the attempt to develop and grow.

Fundamentals

The cryptocurrency market once again failed to bring joy to investors in the past week. Transaction costs in the Bitcoin ecosystem reached the highest level in the world for the third time in history, similar to those observed in 2017 and 2021. The average network speed does not exceed 7 transactions per second. And those who want to transfer money increase the transaction cost to speed up its execution. This caused the average fee to soar to US$31 per transaction on May 8. This is very frustrating for users, but it is welcomed by miners because it is the first time since 2017 that the cost has exceeded the block reward.

As the attempt to develop growth encountered selling pressure of close to US$ 1.14 trillion, the market value of the cryptocurrency was still close to US$ 1.127 trillion, causing the top-ranked cryptocurrency to be mixed in the past 24 hours. Among them, Solana fell 0.7%, XRP rose 5.6%, Bitcoin fell 0.3%, and Ethereum rose moderately.

A stronger USD is also bad for Bitcoin. However, the hope remains that the U.S. banking crisis will continue to support the cryptocurrency market. For many enthusiasts of cryptocurrencies, bitcoin is seen as a safe haven and a hedge similar to physical gold, preventing capital losses.

Lower U.S. interest rates and bank deposit rates are expected to stimulate public interest in the Ethereum Rollups and generate more interest income. In turn, it could open a new bullish trend in the cryptocurrency market. Nevertheless, it is worth noting that prices have not been able to rise from the support level, which is currently close to US$27,000. Investors should be ready for prices to fall below US$25,000, as the market seems poised for a full rebound pullback from the November lows. This also means that the upcoming adjustment may be limited.

Technical Analysis

Bitcoin prices have been in a downtrend since peaking at a 10-month high of 31040 on April 14; At the same time, it also meets our expectations. In the short term, although the price seems to be firmly established above US$26,000 and trying to rebound, the delay in completing the testing of the demand zone is an important factor that drags down the price further, indicating that the price continues to be in a bearish trend.

This trend indicates that the near-term risk tends to be downward. Specifically, the RSI was flat below its neutral level of 50, while the stochastic oscillator began to accelerate in the vicinity of the oversold zone of 20.

If the 20-day SMA continues to limit the upside, the price will test 26660 support in the near term, a 38.2% Fibonacci retracement of the 19540-31064 rally. A break below this level would set the stage for a May bottom at 25,785. If the shorts fail to stop here, the price could continue to break below the threshold of US$25,000.

However, in the bullish case, the bulls may push the price to the near-term resistance level of 27670. If this level is broken, the focus will turn to the 23.6% Fibonacci retracement of 28344, or even test the threshold of US$30,000.

Overall, bitcoin prices have been bearish since mid-April, and its recent recovery efforts have been repeatedly repulsed by the 20-day SMA. Therefore, a clear breakthrough in this level is needed to revive bulls' hopes for a reversal of the trend.

Regarding the trading, as the price is expected to break below short-term support or accelerate to the downside until our target range of 25,000, it is recommended to buy the dips in the demand zone.

Trading Recommendations

Trading direction: Long

Entry price: 25000

Target price: 32395

Stop loss: 22000

Deadline：2022-05-31 23:55:00

Support: 26515, 25797, 25148

Resistance: 27670, 28382, 29149