• Bitcoin will create its first red monthly candle in over half a year tonight as it retraces part of its gains
• The close of the monthly candle will mark the end of seven successive green candles and the end of a record-making streak
• The psychological support of $60,000 is expected to be an essential marker for Bitcoin in the coming week
Bitcoin is set to close its first red monthly candle in over half a year tonight as it retraces part of its recent gains. The close of the monthly candle will end a record-making streak of seven successive green candles. With sentiment turning bearish and no clear bullish catalyst on the horizon, Bitcoin may be ready for a deeper pullback as it retests key support levels.
Bitcoin’s Drawdown in April
Bitcoin opened April around $71,200, a new all-time high monthly candle close. The previous record high monthly close was around $60,500 set in 2021.
Since the start of April, Bitcoin has dropped roughly 15%. At the time of writing, Bitcoin trades at $60,400, down 4% over the past 24 hours.
In the past 24 hours, over $300 million in crypto positions have been liquidated, with the majority coming from longs at $257 million. This indicates the market is becoming less bullish.
Critical Support Levels
The key psychological support level of $60,000 will be important for Bitcoin next week. Sentiment is declining along with buying pressure from Bitcoin ETFs in the US and Hong Kong.
On Binance, significant buy walls of around $60,000 remain, ready to absorb a further dip. However, overall order book liquidity appears relatively low compared to recent months.
With sentiment turning bearish and no clear bullish catalysts ahead, Bitcoin may be driven lower by profit-taking rather than optimism. After the massive 90% rally throughout this cycle, a deeper retracement as Bitcoin retests support levels would not be surprising.
Conclusion
Bitcoin is closing its first red monthly candle since September 2021 tonight. With sentiment declining, a retest of lower support levels between $60,000 and $50,000 is possible in May. However, the critical monthly support level of $60,000 remains key. As long as Bitcoin holds above this historical level, the medium-term bull trend remains intact.
