Bitcoin, the world's leading digital currency, is grappling with a significant price hurdle, according to market analyst Jake Wujastyk.
In layman's terms, Bitcoin is managing to maintain its recent lower value but is finding it tough to exceed a specific price due to the increasing presence of potential sellers on the market.
Wujastyk's analysis involves technical concepts like Volume Weighted Average Price (VWAP), a trading benchmark that offers an average price at which the flagship cryptocurrency has been traded throughout the day.
Bitcoin appears to be perfectly holding onto this average price calculated from a specific significant point in time, referred to as the "swing low."
Gamza KhanzadaevThis pressure often comes from previous buyers who might be looking to sell when the price reaches its break-even point.
This area, visualized as a "volume shelf" on a volume profile chart, is where a high volume of Bitcoin has been traded, indicating that many traders have their positions at this level.
Wujastyk's analysis is especially pertinent given recent market developments. Bitcoin saw a temporary surge on Wednesday, following the latest consumer price index (CPI) report indicating easing inflation rates. This optimism briefly pushed Bitcoin to an intraday high of $28,883 on May 10. However, concerns around market liquidity led to a subsequent drop below $27,000.
According to CoinGecko, Bitcoin currently trades at $27,283.13, marking a 3.4% decrease over the last 24 hours.
Dan Burgin