Bitcoin (BTC), the first-ever cryptocurrency, has seen its market activity shift since the beginning of the year. After reaching a peak of US$63,000 in early April, it has since found support at US$25,000. This level is significant as it's a reliable resistance throughout 2021. Recent analysis, however, indicates that this level may become a support threshold more than a resistance.

Price momentum has been declining since the start of May. The price of Bitcoin has been hovering between US$27,000 and US$30,000, although it dipped below US$27,000 on May 15, falling to its lowest level since mid-March. FxPro senior market analyst Alex Kuptsikevich believes that if the downward trend persists, the asset could fall to US$25,000 in the coming days.

Volatility in the Bitcoin market is another factor that could affect its price. Volatility is a measure of the frequency and speed with which asset prices can change and it was low in May, with Kuptsikevich noting that it had fallen significantly from its peak of 63% in mid-March. Nevertheless, more recent data has seen volatility increase on a daily basis and this may have an effect on the medium-term outlook.

The congestion of the Bitcoin network could also play a role in its future performance. The mempool, which stores unconfirmed transactions, has spiked by 440% since mid-March and the total data size currently exceeds the default maximum threshold of 300MB. This could be attributed to the increased demand for BRC-20 tokens, which has seen inscriptions on the Bitcoin network almost double to 4.78 million. However, it’s worth noting that this congestion could have a bullish or bearish effect on the Bitcoin market, depending on the cause.

In conclusion, the future of the Bitcoin market is uncertain, as different factors are impacting its price. The asset has found support at US$25,000, which could become a reliable threshold in the months ahead. Volatility is rising and the network is congested but the effect these will have on the market is largely dependent on the root of the congestion. Therefore, investors must take care to monitor market activity and react to any fluctuations accordingly.



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