Bitcoin Drops 4% Then Rebounds 2.5% Amid Bull-Bear Debate

Bitcoin's price has been a subject of intense debate among market participants, with differing views on whether the current bull market will continue or is nearing its end. On May 19, Bitcoin experienced a 4% decline at the market open, but quickly rebounded, rising 2.5% from the day’s lows to retarget the $105,000 mark. This volatility has led to varying conclusions about the future trajectory of BTC/USD.

Optimistic traders, such as Rekt Capital, view the current price action as a necessary step for Bitcoin to position itself for a successful post-breakout retest. Rekt Capital emphasized the importance of holding around $104,400 as support. Meanwhile, popular trader Daan Crypto Trades identified $102,000 and $106,000 as key levels to watch, noting that the price has been trading within this range for the past one to two weeks. Daan Crypto Trades advised keeping an eye out for a clean break below either of these levels, as the price has not sustained above or below for more than a day.

Onchain analytics firm Glassnode also highlighted the significance of the $106,000 level, noting that a supply cluster of 31,000 BTC is held at that cost basis. This supply cluster, which originated on December 16, remains unshaken, making $106,600 an important level to watch in the short term.

However, not all traders share this optimism. Roman, another trader, considered weekly timeframes to be no longer in bulls’ favor. He pointed to a rejected resistance, bearish divergences, and low volume as signs that the bull run is likely almost over. Roman also referred to the stochastic relative strength index (RSI) indicator, which is now firmly in “overbought” territory.

Bitcoin's price has been consolidating between $100,000 and $105,000 as investors await a breakout. Data shows that the profit margin for 1-3 month traders swung from -19% to +21% in a month, indicating a shift in sentiment among short-term holders. Despite the volatility, Bitcoin has held steady below the $105,000 mark, with bulls attempting to regain control and push the price higher.

The cryptocurrency's recent price action has been influenced by various factors, including market sentiment and technical indicators. While some traders remain optimistic about Bitcoin's potential to reach new all-time highs, others are cautious, pointing to bearish signs and the possibility of a market correction. As the debate continues, market participants will be closely watching key levels and indicators to gauge the future direction of Bitcoin's price.