Current situation: Bitcoin (BTC) is currently trading around historically high levels, having surpassed $111,000 in recent days, marking the highest daily close ever on May 21, 2025. The past few days have seen volatility, with the price dropping slightly today (May 23) after news of tariff proposals by Trump on EU imports, affecting market sentiment.
Key influencing factors:
Strong bullish momentum: Despite recent declines, Bitcoin remains in a strong bullish trend in the short to medium term. The Relative Strength Index (RSI) indicates an overbought area, which may suggest a potential correction or consolidation in the short term.
ETF Flows: Bitcoin and Ethereum exchange-traded funds (ETFs) continue to attract significant flows, reflecting increasing institutional interest and supporting the price.
Economic and political news: News such as tariff proposals can affect investor sentiment and lead to short-term volatility.
Liquidity and volume: Trading volume in the past 24 hours has decreased, which may indicate a consolidation period.
Technical Analysis (short term):
Resistance levels:
Immediate resistance: around $111,000.
Next resistance: $112,000, then stronger psychological levels at $115,000 and $120,000.
Support levels:
Immediate support: around $107,000.
Stronger support: the 20-day exponential moving average (20-day EMA) around $103,000, then $100,000.
Possible scenarios for today (next 24 hours):
Bullish scenario (most likely):
If institutional interest and flows into ETFs continue, and market sentiment stabilizes, Bitcoin may attempt to break the resistance level of $112,000.
If it successfully consolidates above $110,000, it may target higher levels like $115,000.
Bullish momentum supported by positive trading volume can push the price towards these targets.
Bearish Scenario:
If negative news continues or there is significant profit-taking after recent highs, Bitcoin may drop to the support level of $107,000.
Breaking this level may lead to further decline towards the 20-day exponential moving average (around $103,000) or even the $100,000 level.
A weak bearish divergence in the Relative Strength Index (RSI) indicates a potential price reversal from current levels.
Neutral scenario (consolidation):
Due to Bitcoin reaching overbought levels recently and facing some resistance, the price may enter a sideways consolidation period.
Bitcoin may trade in a narrow range between $109,000 and $111,000 with attempts to break in either direction.
Recommendation:
Given the overall bullish momentum of Bitcoin in the medium term, but with some technical indicators suggesting potential correction or consolidation in the short term (like overbought RSI), the recommendation for today is to be cautious with a bullish bias.
For short-term traders (Intraday Traders):
Buy on dips: Look for buying opportunities if the price retraces towards key support levels (like $107,000 or $103,000) with signs of a rebound.
Monitor resistance levels: Be cautious when approaching resistance levels like $112,000, as the price may face some pressure.
Risk management: Use stop-loss orders to protect capital, especially in a volatile market.
Monitor volume: Increased buying volume at support levels or increased selling volume at resistance levels can provide additional signals.
