Week Ahead: Checking the health of Bitcoin’s bull run

The sentiment among crypto investors is mixed and unsure. After May 15, it was bullish, but between May 21 and 23, the outlook turned bearish. The ongoing choppy price action goes back to Bitcoin (BTC), which was unsure about where it wanted to go next. 

Despite the short-term selling pressure, BTC has held up well, which suggests a continuation of the uptrend or the bull run. 

But before we get into that, let’s explore the important events that could shape this week’s narratives.

Crypto events this week

Monday, May 27:

• Solana (SOL) v1.18 upgrade
• Floki (FLOKI) announcement

Wednesday, May 29:

• GenAI summit

Thursday, May 30:

• Consensus 2024

Friday, May 31:

• Ethereum Classic (ETC) halving

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BTC bears throw in the towel

• As Bitcoin price hit an all-time high of $73,949, it created a buy-side imbalance on the weekly and monthly charts. 
• Soon thereafter, BTC created multiple equal lows around $59,100, with sell-side liquidity accumulating below it. 
• It also showed no signs of recovery, with almost no volatility or buying pressure. 

But the subtle signs were always present and now BTC is at a point – at least from a market structure perspective – where a bullish outlook is a high-probability scenario. 

Here there are a few signs showing why the bull run will most likely resume:

• Bitcoin price collected the sell-side liquidity and rebalanced the aforementioned imbalance, which provided a buying opportunity, as mentioned in an FXStreet publication.
• To make things interesting, BTC never set up a lower low below a key swing low on the daily time frame without recovering above it in the next day or two. This subtle sign was an important message from the bulls that they were not done yet.
• As Bitcoin price rallied 7.54% on May 15, it destroyed almost all the chances that bears had of making a comeback. 
• After the aforementioned rally, BTC produced a daily candlestick close above the 2021 high of $69,138. It also overcame the declining trend line connecting the lower highs formed since 2024’s all-time high. 
• Although the attempt to overcome this hurdle was successful in the short term, BTC slid below it, signaling doubt. However, the declining trend line held, confirming a successful flip into a support floor.
• As long as BTC holds above the declining trend line, the chances of restarting the bull run are high. With the approval of Ethereum spot ETFs and BTC’s continued defense of key support levels, the next target is the $80,000 psychological level. 

BTC/USDT 1-day chart

While the thesis and targets for Bitcoin price make sense from a logical standpoint, investors can never be 100% sure due to the nature of the crypto markets. If the aforementioned declining trend line fails to hold and BTC slides lower, the bullish outlook will slowly start to come undone. 

The final nail in Bitcoin bulls’ coffin, in the short term, will be a breach of the psychological level of $60,000 in a weekly time frame. This move would definitely produce a lower low on the weekly chart and shift the market structure favoring bears. This move could definitely attract panicking profit-takers and add further headwinds for the bulls.

What to expect if BTC restarts bull run?

The Ethereum narrative kick-off could surprise investors since many ETH-based tokens have been overshadowed either by AI tokens due to the hype or newly launched tokens. Despite such a massive rally since 2023, ETH has barely performed. Hence, investors can expect Ethereum and ETH-based altcoins to reign supreme in the upcoming phase of the bull run.

Here’s an ETH altcoin watchlist:

ETH-beta plays

Apart from the Ethereum category, there are a few other sectors that could see a significant spike in liquidity. To know more - Click here.