Bitcoin, if 'this' is broken, one side will crash..."5% volatility coming soon"

▲ Bitcoin (BTC)

While Bitcoin (BTC) moves in a narrow range around the $77,000 mark, market analysts predict that a price fluctuation of more than 5% could occur soon. Although mixed signals surrounding the possibility of a peace agreement between the US and Iran have put pressure on risk assets overall, some traders have emphasized that Bitcoin's price structure has not yet been damaged.

Cointelegraph reported on May 21 (local time) that the possibility of at least a 5% price fluctuation was raised as Bitcoin remained near $77,000. According to TradingView data, Bitcoin's price was trapped in a narrow range, and leveraged positions were concentrated above and below the spot price.

Trader Daan Crypto Trades stated in an X (formerly Twitter) analysis, “There are a few large clusters around the price. In the short term, the area around $78,000 and the $76,500 to $77,000 range are particularly noticeable.” He added, “Since the price has remained in a fairly narrow range for the past few days, I expect another significant move of more than 5% soon.”

CoinGlass data showed that short positions accounted for most of the losses in the cryptocurrency market over the past 24 hours as of the time of writing. The X analysis account Cryptic Trades assessed, “Bitcoin bears are being short-squeezed in real-time.” He continued, “Open interest decreased by more than 12,000 as the price went up. This is why you shouldn't respond to bullish backtests with shorts.”

Cryptic Trades remained optimistic about Bitcoin's market strength despite several support lines breaking in recent days. He considered Bitcoin maintaining above $74,000 as the most likely outcome. He also explained, “From a technical perspective, taking shorts or hedging spot holdings now is not appropriate because the market structure is still intact.”

However, macroeconomic variables remained a burden on the market. On this day, risk assets, including Bitcoin, faced familiar macroeconomic headwinds, and WTI crude oil prices rose back above $100 per barrel. The conflict between the US and Iran remained a key variable amidst conflicting reports surrounding uranium enrichment and disruptions to oil movement through the Strait of Hormuz.

The previous day, US President Donald Trump signaled an imminent peace agreement with Iran, driving down oil prices and US Treasury yields. Crypto trader and analyst Michaël Van de Poppe said, “It's the same formula. If this trend continues and the agreement becomes more likely to be finalized, we will see yields fall further, especially in Japan.” He added, “When yields fall, risk assets can rally more strongly.”

Bitcoin is awaiting direction with leveraged positions concentrated between $76,500 and $78,000. The possibility of short-term sharp fluctuations, short position liquidation pressure, US-Iran related macro variables, and Treasury yield trends are intertwined, highlighting the price range around $77,000 as the starting point for the next volatility.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*