Bitcoin continues to demonstrate activity in May 2023, closing the previous month at $97,406. This movement suggests both positive and negative prospects for the cryptocurrency.
Overview of the Current Situation with Bitcoin
Bitcoin began May on a bullish note, reaching $97,406. This move surpassed an important resistance level, bolstering bullish sentiment, especially given Bitcoin's previous struggles to hold above this mark since February. However, the current position of Bitcoin above the Short-Term Holder (STH) realized price may also carry bearish implications.
Three Scenarios for Bitcoin
Crypto analyst Axel Adler outlined three possible scenarios for BTC after breaking through the key supply level at $97,000. The first scenario involves the momentum ratio breaking above 1.0, potentially leading to a fresh upward impulse and pushing Bitcoin's price to the $150,000–$175,000 range. The second scenario suggests a drop in the ratio to 0.75 or lower, which may lead STHs to cash out and cause a correction to the $70,000–$85,000 range. The third scenario includes the ratio remaining within the 0.8-1.0 range, which would likely maintain price fluctuations between $90,000 and $110,000.
Most Likely Movement for Bitcoin
In a bullish scenario, if the momentum ratio climbs above 1.0 and sustains, a rally toward the $150,000–$175,000 range could be witnessed. The current MVRV stands at 2.16, which is below the typical threshold of 3.9 seen at market peaks, indicating further room for upside. However, if sustained buying pressure does not emerge, a consolidation scenario between $90,000–$110,000 becomes more plausible. Given a previous correction has occurred, both bullish and consolidation scenarios are more significant than a deeper pullback.
Nonetheless, Bitcoin displays significant volatility, and its future direction will depend on market dynamics and the level of buyer interest.
