As BTC price nears $60K again, here are 5 things to watch out for

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BTC price nears $60K again

As the new week begins, BTC price nears $60K again challenging common but notable all-time highs, rallying to $58,000 on Monday.

Following a surprise rally on Friday, the largest cryptocurrency saw a gradual decline over the weekend. However, this was reversed overnight on Sunday, and BTC/USD is now fighting resistance around $60,000.

  1. Bitcoin snubs DXY profits

Commodities and equities are providing fewer signals than normal due to numerous major markets being closed for the May holidays.

Asian stocks fell, fueled by a slew of problems, including India’s ongoing COVID-19 fiasco.

At the same time, S& P 500 futures in the United States are already regaining ground lost on Friday.

Unlike Bitcoin, markets did not respond well to reports that some banks could reduce fiscal support measures for the virus, which were a key factor in the S&P’s record performance last year.

The transition was accompanied by a change in the dollar’s resilience, with the US dollar currency index (DXY) seeing impressive gains after a month of decline.

DXY and Bitcoin tend to be inversely correlated, but last Friday proved to be another notable exception. BTC/USD climbed conspicuously as if out of nowhere on the day, passing $58,300 before reversing.

A key topic remains inflation senior U.S. officials believe that trillions of dollars in virus stimulus will have little impact on it, while others disagree.

2. Spot rally enters next stage

Another day, another stunning Bitcoin comeback. BTC market action is now making good on its further gains late last week, only a week after recovering from its dip to near $46,000.

Although the weekend was mostly drab, Monday brought the kind of “buying frenzy” that Warren Buffett’s arch-rival has been eyeing on conventional markets.

At the time of writing, BTC/USD has passed $58,300 — the site of an all-time high from February — and is now continuing higher, calming near $59,000.

A look at buy and sell demand from major exchange Binance’s orderbook reveals that resistance remains solid at $60,000 and above, and bulls will need to smash through many walls of sell orders to break out above the current all-time high of $64,500.

Another big stumbling block is now $68,000. On the help hand, the picture is less rosy. $52,000 is the first reliable amount for traders, followed by $52,000 and $52,000.

Nonetheless, as stablecoin balances on exchanges fill up, Bitcoin could be entering a new bullish phase.

Against the backdrop of massive “printing” of these commodities, such a development increases the likelihood of substantial buyer demand materializing, boosting spot price action.

“Stable coins are flowing back into exchanges. You know what that means,” analyst Jan Wuestenfeld summarized.

Friday’s gains were notably driven by “genuine” buying among spot traders, while leveraged trades actually declined.

3. Cat and mouse with Ethereum

Another theory focuses on Bitcoin simply playing catch-up with a red-hot altcoin scene, led by Ether (ETH).

The performance has exceeded expectations; ETH/USD is now above $3,000, up 28 percent in the last week against 11 percent for Bitcoin.

This shaved even more clout from Bitcoin’s market capitalization, which is now at 47.7%, the lowest level since July 2018.

“I wouldn’t be surprised if we see $3500 $ETH this week,” popular Twitter trader Crypto Chase forecast, along with further upside against Bitcoin.

4. Fundamentals flush out hash crash

Back to Bitcoin and its network fundamentals, which are still catching up despite experiencing a “reset” in recent weeks.

This first manifested itself in a brief drop in hashrate due to flooding in China. The network difficulty of Bitcoin started to decline as a result of the decrease in participants.

Since difficulty changes every two weeks, it took until Saturday for the new difficulty to kick in.

With that out of the way, the way is clear for mining hash rate to increase competitiveness and difficulty to return to positive, rather than negative, changes.

It’s still early; current projections call for a further decrease, this time of about 7%.

Meanwhile, the hash rate has nearly recovered from the initial shock, now hovering about 161 exahashes per second. According to the tracking site MiningPoolStats, it peaked at 168 EH/s.

5. Greed

According to the ever-popular Crypto Fear & Greed Index, which on Monday is back in “greed” territory after more than doubling since late last week.

The Index uses a basket of factors to create a normalized score between 0 and 100 for how greedy or fearful crypto markets broadly are on a given day.

Its score tends to indicate when a price floor has been established, or when a sell-off is imminent. However, at 61/100, the Index still has space to rise until signaling a local top — “extreme greed” has yet to arrive.

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