Bitcoin price has recently been the talk of the town as the asset experienced a severe plunge today following Binance’s FUD. The leading digital currency is currently witnessing a downturn in sentiment following an unprecedented surge in transaction fees and a nearly 98% full mempool. However, enthusiasts and investors are eyeing a potential rebound soon, as the digital currency has just reached a crucial support level.
Binance FUD Brings Bearish BTC Market
Market participants attribute the core issue to mass transactions “spamming” the Bitcoin network. However, the situation was exacerbated by the world’s largest cryptocurrency exchange, Binance, which repeatedly suspended BTC withdrawals.
Citing “congestion” as the reason for these interruptions, Binance generated a backlog of withdrawal requests, further intensifying the prevailing apprehensive market sentiment.
Bitcoin quarterly futures are favored by whales and arbitrage desks. These fixed-month contracts usually exhibit a minor premium compared to spot markets, signifying that sellers demand higher compensation for postponing settlement.
Consequently, in a stable market, BTC futures contracts should exhibit a 5-to-10% annualized premium— a scenario referred to as contango, a phenomenon that is not exclusive to the crypto market.
Over the past two weeks, Bitcoin traders have displayed remarkable caution. During the recent rally that peaked at $29,850 on May 6, there was no significant increase in demand for leveraged long positions. Furthermore, the following 6.8% correction down to $27,800 resulted in the BTC futures premium reaching its lowest point in two months, standing at 1.5%.
It is anticipated that Bitcoin’s futures premium has touched the bottom level, and the asset will soon experience a surge in long options in order to become profitable during the price dip.
BTC’s Rebound From $27.5K
Over the last two weeks, the price of Bitcoin has fluctuated within a limited 8.5% range, oscillating between $27,250 and $29,550. This has led to a decrease in the 40-day volatility measurement, which now falls under 40%. BTC is currently trading at $27.9K, declining over 3.5% from yesterday’s rate.
Bitcoin price has recently lost its critical support level at $28K, and bears are trying to flip this level into a resistance zone. However, bulls made a quick comeback as the BTC price recovered after taking support at $27.5K. On the daily price chart, Bitcoin is trading near the EMA-50 trend line, hinting that bulls are still in the game to push the price above $28K.
The RSI trend line has enough room to drop, which shows potential buying pressure in the price chart. Despite the bearish market sentiment, SMA-14 shows no sign of dropping below as it consolidates near the level of 52.
Bitcoin price is predicted to test its final support at $27,100, from which bulls might get confidence in opening long positions. A breakout above $28.3K will push the asset above $29K again.
The post appeared first on Coinpedia
