Bitcoin rebounds to $27,000, but crypto investors worry about liquidity

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  • Bitcoin’s move back up to $28,000 has been met with resistance.
  • The price of bitcoin seems to be set to remain in a range, but if risk aversion triggers a de-risking event, selling pressure may develop. 
  • The bulls drove Ethereum’s price up from the $1,750 support level to the $1,850 resistance level.
  • Two of the major market-making companies in the world, Jane Street Group and Jump Crypto, are refraining from trading digital assets in the US as authorities tighten down on the sector.  
  • Due to the lack of clarity around crypto regulations, Jane Street has decided to substantially decrease its global crypto operations.
  • In 2023 Q1, US-licensed cryptocurrency exchanges Coinbase, Kraken, and Binance.US lost between 0.3%-1.5% market share.

Bitcoin (BTC-USD) is now experiencing turmoil and uncertainty, as seen by a downward trend. This is primarily due to macroeconomic considerations, such as fears about the imminent debt ceiling and a continuing financial crisis. These issues are decreasing investor trust in risk assets, prompting a hunt for safer investment alternatives. The debt limit discussions are still in the spotlight, and they are expected to influence price activity in the S&P 500, DXY, and cryptocurrency markets in the short future. A hypothetical US government sovereign default might cause fear in the financial markets, leading to increased volatility.

For the previous several days, the S&P 500 Index has been trading close to the resistance level of 4,118. This predicts a fierce struggle for dominance between the bulls and the bears in the near future. The bulls eventually succeeded in pushing and maintaining the U.S. Dollar Index (DXY) above the 101.80 mark on May 11 after failing for a few days. After a few of days of stability, the bulls drove Ethereum’s price up from the $1,750 support level to the $1,850 resistance level.


Daily transactions for Bitcoin have reached all-time highs, a development that has substantial effects on the currency’s price. The increased market activity and interest that this greater transaction volume often signals might eventually raise the demand for Bitcoin. It might put more upward pressure on the price of Bitcoin if this increased demand isn’t met by an equivalent rise in supply.

Litecoin’s Halving event:

The third Litecoin halving is anticipated to take place at block 2,520,000 on August 2, 2023. The date might, however, vary as a result of changes in the network’s hash rate.

The incentives that cryptocurrency miners earn for confirming transactions on a blockchain are reduced by half via a process known as “halving.” In accordance with the laws of supply and demand, this is done to slow down the pace at which new units of a digital asset are produced. This creates scarcity and may increase the asset’s value.

In order to combat inflation and promote a sustainable and steady development trajectory for cryptocurrency, the number of coins in circulation will be halved.

Litecoin supply distribution

The Litecoin network has seen a significant increase in address activity over the last several weeks. Along with an increase in LTC transactions, there are more tiny wallets than ever before. The quantity of distinct LTC wallets that are now actively engaging and sending transfers has increased. These transactions are nonetheless modest in magnitude, according to Santiment statistics.

Bitcoin Price Analysis:

The bulls are trying to push Bitcoin back above the psychological level of $27,000. This suggests that there could be strong buying at lower prices. At $28,140 and again at the support line around $28,300, the recovery rise is likely to run into a lot of sellers. If the price falls from the support above it, the bears will try again to push the BTC/USDT pair down to $26,550.

This is an important level to keep an eye on because if it breaks, selling could get worse and the pair could fall to $25,000. On the way up, the bulls will need to break above the support line around $28,140 to show that a new up move is about to start. The pair could go up to $29,000 first and then try to go above $31,500.  The price of bitcoin seems to be set to remain in a range, but if risk aversion triggers a de-risking event, selling pressure may develop.


Concluding Thoughts:

Currently, the cryptocurrency industry is navigating a challenging stage characterized by a declining trend. The impending debt limit and the ongoing banking crisis, both of which are undermining investor confidence in risk assets, are two macroeconomic variables that have primarily contributed to this. This is made worse by the current global financial crisis, which was brought on by the failure of many large U.S. banks and is having a ripple effect on the world economy. This crisis is driving investors to seek out safer assets and depleting bank accounts. Bitcoin prices have seen a rapid rise from a prior low to a crucial barrier level amid this upheaval.

However, this crisis has also created a noticeable amount of uncertainty in the cryptocurrency industry, with conflicting effects on Bitcoin’s pricing. On the one hand, when conventional banking institutions start to fail, Bitcoin is becoming more and more regarded as a “safe-haven” asset. This viewpoint may increase interest in Bitcoin, driving up the price. On the other hand, investors are now leery of speculative assets like Bitcoin due to the current market volatility and unpredictability. A sell-off in the Bitcoin market and a subsequent decline in its price might result from investors attempting to reduce risk by shifting their assets into more established, safe investments like gold or government bonds. 

In spite of all this disbelief, it is worth noting that any drop in Bitcoin’s price could be a good time for long-term buyers to buy.

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