BTC trading volume remains subdued, suggesting the ascent may not be sustainable
Bitcoin price surged to more than three-month highs on Monday but failed to preserve upside momentum and has been correcting lower since then. The price briefly exceeded the $50,000 psychological level before retreating to the $47,200 region on Wednesday.
Of note, despite the recent rally, bitcoin trading volume remains subdued, suggesting the ascent may not be sustainable. Low volume also implies that the market is not ready for a decisive break above the $50,000 handle just yet.
However, the bearish correction doesn’t derail the bull case, at least for the time being. Also on the positive side, extreme greed is back while the fear is gone, for now, suggesting the market has turned optimistic.
In the immediate term, the BTCUSD pair needs to hold above the $47,000 figure. Otherwise, the 20- and 200-DMAs (today at $46,400 and $45,900, respectively) will come back into market focus. If the selling pressure intensifies anytime soon, these moving averages could act as support levels and trigger a bounce eventually.
On the weekly timeframes, the price turned negative while the RSI is now pointing south, suggesting the recovery potential is limited at this stage. A daily close below $47,000 would mark come deterioration in the short-term technical picture. At the same time, bearish risks could be capped by the fact that the dollar is paring its light gains during the European hours.
Meanwhile, the longer-term outlook for the cryptocurrency market remains upbeat as global acceptance continues while attracting large investors capable of pushing the prices much higher from the current levels. In the medium term, the digital coin could regain the $55,000 figure to register fresh record highs, probably towards the end of this year.