Bitcoin Price Analysts Eyeing $25K as Support Following Momentum Shift

Bitcoin’s return to $25,000 looks like a very “real prospect” in the coming days, FxPro senior market analyst Alex Kuptsikevich told Blockworks

article-image

AGGIO/Shutterstock, modified by Blockworks

share

Bitcoin (BTC) continues to flirt with valuations not seen in nearly two months, as price momentum nosedives.

The asset, which is down 2.5% on the day to $26,300, lost its footing above a support threshold along $27,000 sending it to its lowest point since March 14.

Bitcoin’s return to $25,000 looks like a very “real prospect” in the coming days, FxPro senior market analyst Alex Kuptsikevich told Blockworks in an email.

“The bears will have their work cut out for them here, as some oversold conditions will have built up by then,” he said, highlighting the distorted equilibrium between buyers and sellers.

For a time, volatility was muted as prices remained relatively locked between $27,000 and $30,000. That was expected to persist throughout May, as declining interest across crypto derivatives effectively sapped long and short sellers.

It’s worth noting that as of May 8, bitcoin volatility was hovering at its lowest point since the beginning of January at 29% — down significantly from March 13’s peak of 63%, data from IntoTheBlock shows.

However, volatility has been spiking on the daily time frame since May 8 and that uptick is poised to feed into medium-term price action.

Still, the fact that the price has not yet breached $25,000 is significant when viewing this year’s performance, Kuptsikevich added.

“Now it has every chance of becoming an equally reliable support,” he said.

But first, bitcoin would need to sort out its congestion issues, Rich Rosenblum CEO of market maker GSR told Blockworks.

Data reveals a significant increase in unconfirmed Bitcoin transactions, which currently stand at 284,369. This is a 440% rise compared to the figure of 52,600 observed nearly two months ago on March 17.

The current weight of the mempool, which refers to the total data size within it, is about 871 MB. This exceeds the default maximum mempool limit of 300MB set by Bitcoin Core, data shows.

It’s important to note that not every node operator sticks to the default 300MB limit. Some opt for higher thresholds to prevent discarding transactions with lower fees. 

When this occurs, transactions continue to be processed, they just might come with a higher cost, likely the result of a newly popular use case for the world’s oldest crypto.

Over the past week, there has been a substantial increase in the number of Ordinals inscriptions on the Bitcoin network, which has almost doubled from 2.5 million to 4.78 million. This surge is largely attributed to the growing interest in the BRC-20 token.

“Organic congestion due to excitement over BRC-20? Well, that’s probably bullish that we’re finally seeing enough adoption that it’s slowing the network,” Rosenblum said.

If, on the other hand, the network is deliberately flooded with a continuous cycle of small transactions in an attempt to profit from a bitcoin short position. “That’s bearish and hard to police in a decentralized world,” he added.


Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.


Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.


Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.


Tags

upcoming event

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. This year’s event will be held in our nation’s capital, where industry leaders, policymakers, and institutional experts will come together to discuss the latest developments and challenges in the ever-evolving world of cryptocurrency. […]

upcoming event

MON - WED, SEPT. 11 - 13, 2023

2022 was a meme.Skeptics danced, believers believed.Eventually, newcomers turned away, drained of liquidity and hope.Now, the tide is shifting and it’s time to rebuild. Permissionless II is the brainchild of Blockworks and Bankless. It’s not just a conference, but a call […]

recent research

Cosmos Hub: ATOM Economic Zone

Research

Replicated Security, the Hub’s Validation-as-a-Service offering that went live in March, is the first step in bringing value accrual to ATOM stakers.

/

article-image

Bitcoin price predictions are meaningless, so let’s expend our prediction energy on something that actually matters

article-image

A new complaint against Elon Musk and Tesla alleges that Musk manipulated both bitcoin and dogecoin

article-image

Kenya’s central bank doesn’t seem enamored by the idea of a CBDC but hasn’t slammed the door shut yet

article-image

Both Ethereum and Solana have enjoyed vibrant DeFi environments, but this has not yet been the case for Cosmos

article-image

As Japan takes important step forward on stablecoins, industry participants say, proposed US laws around such crypto assets remain in flux

article-image

Stablecoins offer global financial access and on-chain transactions without limitations, while FedNow falls short in terms of utility, global reach and inclusivity