The price of Bitcoin (BTC) experienced a rollercoaster ride that defied expectations in the first weekend of May, surging over 12.5% to over $64,000. This unexpected surge was fueled by a number of positive factors, including the US Federal Reserve’s decision to keep interest rates on hold and encouraging US employment data. But analysts are divided over whether this is the start of a sustained bull run or a temporary reprieve before another downturn.

Weekend spark triggers Bitcoin price surge

The price increase at the end of the week was attributed to several important events. First, the US Federal Reserve’s commitment to keep interest rates stable through 2024 has instilled confidence in the market. Low interest rates usually mean increased investment in riskier assets such as Bitcoin. In addition, positive US employment data pointing to a decline in jobless claims further supported the cryptocurrency’s ongoing recovery.

While the recent surge is certainly a positive sign, technical analysis suggests that Bitcoin could face a short-term correction in May. The price is currently hovering near the 50-day exponential moving average (EMA), an important indicator for measuring momentum. A decisive close above this level could push Bitcoin towards $69,650. However, a failure to break this resistance could lead to a period of consolidation or even a reversal. In this scenario, the next potential support level is around $60,500.

Analysts have different views

The analyst community is divided on the future trajectory of Bitcoin. Some, such as SHIB Knight and Steph is Crypto, remain optimistic and predict a long bull run with targets as high as $100,000. They point to technical indicators such as bull flag setups and RSI breakouts as evidence of a bullish trend.

Others, however, remain cautious. The Bitcoin Net Unrealized Profit/Loss (NUPL) metric shows that a significant portion of Bitcoin holders are enjoying significant unrealized gains. Historically, such high NUPL values have often preceded price corrections. Additionally, the formation of an inverse head and shoulders pattern, which is a bullish trend indicator, could potentially cause Bitcoin to fall to $60,000 before reaching new highs.

Emphasis on CME gap for Bitcoin price

However, Daan Crypto Trades warned against adding to green candles over the weekend, emphasizing the importance of patience and observing how the charts play out. He also highlighted the existence of a “gap” between the BTC/USD price and the CME Group Bitcoin futures closing price, a gap that BTC/USD tends to fill later.

Credible Crypto, on the other hand, suggests two possible outcomes for the current BTC price action, with the current space relatively short of liquidity. It sees two scenarios: Either Bitcoin maintains local highs and holds until major resistance, allowing it to fill open positions in altcoins, or it fails to sustain the recovery and suffers an early collapse, creating ideal short zones for most altcoins.

Keith Alan, co-founder of trading resource Material Instruments, warns that a correction could easily come thanks to poor order book liquidity. He emphasizes the need to replenish quote liquidity for the uptrend to continue, otherwise it won’t take too much time to recover from the poor liquidity.

What to look out for in the market?

Traders need to monitor several important factors in the coming weeks. First, will Bitcoin decisively break above the $64,895 resistance level? Second, will the NUPL metric show bearish signs pointing to a potential correction? Finally, will the inverse head and shoulders pattern be confirmed, potentially leading to a short-term decline followed by a rally?

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