Why is Bitcoin price stuck?

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Bitcoin (BTC) continues its sideways BTC price action below $27,000 on May 22 as bulls and bears struggle to break the deadlock.

In what sense Bitcoin?

Notably, the price of BTC has been fluctuating inside a narrowing ascending triangle range since May 11, defined by horizontal resistance at around $27,500 and rising trendline support currently near 26. $890.

Four-hour BTC/USD price chart. Source: Trading View

On May 22, Bitcoin fell below the support trendline at around $26,550, but quickly rallied thereafter to $26,900, a bullish rejection. Meanwhile, volumes were relatively lower, suggesting that fewer traders participated in the intraday dump and pump move.

Taken together, these techniques illustrate an ongoing bias conflict between traders. In other words, they are unsure of the direction of Bitcoin’s next price trend with the same number of buyers and sellers, which derivatives also hints at.

Why is the price of BTC not moving?

Flat price action in the Bitcoin market can precede periods of extreme price volatility, triggered by large events.

For example, Bitcoin fluctuated in the $16,000-17,500 range between November 9, 2022 and January 10, 2023, just after the collapse of crypto exchange FTX. The price attempted to break above and below the range on some days but failed to establish a recovery trend.

The market saw a similar trend after the sharp drop in BTC prices caused by the Terra collapse in May 2022. Notably, BTC/USD traded in the $28,000-$30,000 range for nearly a month before entering a phase of decisive rupture.

BTC/USD daily price chart. Source: Trading View

Bitcoin’s flat trajectory in May 2023 followed the US banking crisis rally two months ago with numerous failed attempts to break above $30,000, a level of psychological resistance.

In other words, Bitcoin traders are once again waiting for a potential market trigger that could decisively push the price of BTC in either direction.

Related: How Do Fed Interest Rates Impact The Crypto Market?

A major potential event will be the Federal Reserve’s interest rate decision next month.

Currently, the conflicting outlook on rising interest rates is likely the biggest factor driving the sideways action in equities, including risk assets and cryptocurrencies. In fact, the price of BTC had one of its least volatile periods since April, according to historical volatility data.

30-day Bitcoin price volatility after influential events. Source: BuyBitcoinWorldwide.comWhat’s next for BTC price in the near term?

Meanwhile, technicals show that a potential break above its 50-day exponential moving average (50-day EMA; the red wave) around $27,580 is in play.

If that happens, BTC price could retest the important resistance level of $30,000, where a rejection will be highly likely on the first attempt.

BTC/USD daily price chart. Source: Trading View

Conversely, a pullback in the 50-day EMA would put BTC price on its way to the next big level of support for a potential bounce back to its 200-day EMA (the blue wave) near $25,000.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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