BTC is treating yesterday's failed push to 78,000 as confirmation of the April bear market rally reversal scenario, with 79,000 the reclaim line and April's value area low below 72,000 the downside target. Eyeing tomorrow's PCE and GDP prints for additional headwinds.
🔴 May 27, 8:47am ET
Yesterday's late-morning short squeeze pushed into 78,000 and reversed, with price pulling back to a tight range between 76,000 and 75,000.
We're treating this as a reversal in the bear market rally that started in early April and recently rejected from 82,000 until there's a convincing reclaim of 79,000 above the local range.
The 4-hour chart shows a rejection from 82,000 followed by a series of lower highs and lower lows, with each bounce capped by the 50- and 100-period EMAs.
Until those EMAs are reclaimed, downtrend continuation remains the base case.
The yearly VWAP at 74,800 provided support during the weekend pullback.
On any breakout from the local range, 76,800 is the next reaction level to watch: Monday's low and last week's point of control.
With price stuck below May's value area, it continues to drift toward April's value area low below 72,000.
77,000 is May's point of control: until that's reclaimed, downtrend continuation stays the base case with sellers in control.
Shorts reopened after yesterday's squeeze, with open interest rising as CVD falls.
78,000 sets up as the next squeeze target on a push higher; otherwise, expect price to start pushing longs offside below 75,000.
Risk appetite has climbed since early April. Bitcoin dominance rose alongside it but began pulling back in early May as a pocket of high-beta names started to outperform.
Equities outperformed Bitcoin over the same period, while gold, silver, and oil lagged.
Core PCE and Q1 GDP print tomorrow, the next read on whether the stagflation scenario continues to play out.
Follow @ShikumiDaily for more session commentary and analysis.
The defining question for the New York session is whether buyers can reclaim 79,000 to invalidate the bear market rally reversal thesis, or whether the lower-high lower-low structure that started at last week's failed 82,000 reclaim extends through 75,000 and toward April's value area low below 72,000.
Asia and London ran a quiet consolidation between 75,000 and 76,000 after yesterday's short squeeze into 78,000 reversed. The 4-hour structure remains capped by the 50- and 100-period EMAs, while shorts have reopened with open interest rising and CVD falling, leaving 78,000 as the next squeeze target on a push higher.
The cleanest tactical read: a clean reclaim of 79,000 with break of the EMA caps invalidates the downtrend thesis and opens a return toward May's value area; a flush through 75,000 confirms the structural drift toward April's value area low, all ahead of tomorrow morning's PCE and GDP prints...