$107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week

Cryptocurrency

Summary:

Bitcoin is already testing traders' nerves and pockets as the highest weekly close ever was followed by a dive back to $102,000.

Bitcoin starts a new week with a long-awaited breakout from a narrow trading range around $103,000.

BTC price action grabs liquidity before reversing to its starting position, liquidating many an emotional trader on the way. A fakeout or a taste of things to come?

The May 18 daily and weekly close nonetheless became Bitcoin’s highest ever.

US trade deals remain high on the list of macro volatility triggers for risk asset traders this week.

Crypto’s correlation with stocks paints a mixed picture, adding to uncertainty over how macro developments will influence Bitcoin and altcoins going forward.

Bitcoin exchange volume delta becomes a key ingredient in assessing the staying power of BTC price breakouts, per analysis from CryptoQuant.

A liquidity grab for the ages

Bitcoin price action delivered some “classic” moves around the May 18 weekly close.

A trip to new multimonth highs near $107,000 was followed by a 4% correction in a matter of hours, data from Cointelegraph Markets Pro and TradingView shows. $107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_1

$107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_1

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

The spike took out a block of liquidity nestled close to all-time highs, with BTC/USD performing a liquidity “grab” designed to first squeeze out shorts and then trap late longs.

“Classic liquidity trap above the recent high and reversal downwards,” crypto trader, analyst and entrepreneur Michaël van de Poppe responded on X.

“I think we'll do the same at $100K before we'll start breaking out above the ATHs. Those are the zones to accumulate your Bitcoin.”

BTC/USDT 4-hour chart with RSI data. Source: Michaël van de Poppe/X

Data from monitoring resource CoinGlass showed ask liquidity being replenished at $107,500, keeping the price from heading higher. The market then took out bid liquidity to $102,000.

Total crypto liquidations in the 24 hours to the time of writing were $673 million.

$107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_3

BTC liquidation heatmap. Source: CoinGlass

Discussing the outlook for Bitcoin, trader CrypNuevo was among those arguing for caution instead of entering at any level in the current range above $100,000.

“From a risk management perspective, I don’t see it worth it to go long right now at market price,” he wrote in an X thread prior to the weekly close volatility.

“Yes, price could go up as the HTF trend suggests but as a trader I look for low risk entries. We're currently at resistance. Clearing it would make a much more attractive entry.”

$107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_4

BTC/USDT 1-week chart with 50EMA. Source: CrypNuevo/X

CrypNuevo acknowledged that bullish signals on high timeframes remain and highlighted the retest of the 50-week exponential moving average (EMA) in April, which has historically led to new all-time highs.

This weekend, another prediction called for $116,000 to arrive in the coming days.

Bitcoin scores highest weekly close in history

It may not have lasted long, but Bitcoin’s latest weekly close has become the highest ever recorded.

Coming in at around $106,500, the weekly candle also allowed for a new all-time high daily close.

$107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_5

BTC/USD 1-week chart. Source: Cointelegraph/TradingView

Despite the subsequent correction of nearly 4%, traders are keen to celebrate what they see as an underlying desire for the market to push higher.

$107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_6

“Highest weekly close ever followed by a red start to the week? Yeah - get the low in early, this week likely ends in the green big time,” trader Jelle argued in an X analysis.

Fellow trader Chad noted that BTC/USD has also managed to close above a key Fibonacci extension level for two consecutive weeks — a first of its kind. $107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_7

$107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_7

BTC/USD 1-week chart with Fibonacci levels. Source: Chad/X

Private wealth manager Swissblock Technologies saw one key ingredient to bullish continuation.

“Bitcoin flirted with $107K, grabbed liquidity above $104K–$106K but failed to hold,” it summarized in its latest X reaction.

“Back in the range, support holding, for now. Bulls have one job: defend this range.” $107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_8

$107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_8

BTC price data. Source: Swissblock Technologies/X

CoinGlass showed that May is a highly varied month for BTC price action. Currently, its 10% gains sit in the middle of a wide range of historical outcomes, with under two weeks left until the monthly close. $107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_9

$107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_9

BTC/USD monthly returns (screenshot). Source: CoinGlass

US trade war rumbles on as Bitcoin ignores rate-cut odds

A lack of crucial macroeconomic data reports this week places the focus on the Federal Reserve and US trade deals.

In particular, markets will be looking for positive developments regarding trade ties between the US and its partners. Treasury Secretary Scott Bessent promised to enact new tariffs on those who do not negotiate in “good faith.”

News of a deal with China caused a snap reaction for stocks earlier this month, with traders feeling a sense of relief.

This may not be so evident as the week begins, thanks to the recent US credit downgrade by Moody’s, wiping 1% off stocks’ futures prior to the first Wall Street open.

With the dollar again under pressure, trading resource The Kobeissi Letter suggested that Bitcoin and altcoins may still benefit in the current climate.

“Crypto is loving the Moody’s downgrade: Bitcoin is now 4% away from a new all time high and up over +40% since its April low,” it noted around the weekly close.

“As the US Dollar weakens and uncertainty rises, Bitcoin and Gold are thriving. Instability is Bitcoin’s best friend.”

US dollar Index (DXY) 1-day chart. Source: Cointelegraph/TradingView

Crypto is also increasingly resilient to hawkish cues from the Fed, which has given markets reason to believe that interest rate cuts will not come before September.

Data from CME Group’s FedWatch Tool shows the odds of a cut at the Fed’s upcoming June meeting at just 12%. Jobless claims on May 22 could shift those expectations if the result differs significantly from predictions. $107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_11

$107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_11

Fed target rate probabilities (screenshot). Source: CME Group

Fed Chair Jerome Powell will deliver the annual Georgetown University Law Center Commencement Address on May 25, but it is unlikely to provide much policy insight.

Crypto stocks correlation in flux

Diverging reactions to the Moody’s downgrade set the stage for a debate around crypto’s correlation with US stocks.

In its latest analysis, research firm Santiment could not draw a clear conclusion over the two asset classes’ relationship, calling them “somewhat correlated.”

“With the 90-day tariff pause between the US & China Monday, markets remain within striking distance of all-time highs,” it summarized on May 17, referring to the S&P 500, Bitcoin and gold. $107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_12

$107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_12

Bitcoin vs. S&P 500 vs. gold. Source: Santiment/X

Separate findings from blockchain data provider RedStone Oracles drew a distinction between long- and short-term correlation.

While negative on a rolling seven-day basis, it told Cointelegraph, a 30-day perspective delivers a “valuable correlation” between Bitcoin and the S&P 500. $107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_13

$107K Fakeout or New All-Time Highs? 5 Things to Know in Bitcoin This Week_13

Bitcoin, S&P 500, 30-day rolling correlation, 1-year chart. Source: Redstone Oracles

Meanwhile, market participants have aired frustration at crypto’s susceptibility to the same volatility triggers impacting stocks.

“It was a lot more enjoyable when $BTC traded independently of stocks,” commentator IncomeSharks told X followers on May 19.

“It seems now it's just a way for people to trade stock futures during the weekend and mirror what the $SPY is doing during the week.”

Volume delta warns over “local market top”

Considering what it might take to launch Bitcoin back into price discovery, a new analysis looked at exchange order-book behavior.

Binance, in particular, was under the microscope as the exchange with the largest spot volumes. Volume delta, onchain analytics platform CryptoQuant said, is a key ingredient in sustained price moves.

“After the recent market correction, the spot net volume delta on Binance has turned positive again,” contributor Darkfost wrote in a “Quicktake” blog post on May 18.

“This signals that buying activity is picking up on spot markets, but more importantly, that selling pressure has significantly declined, even with BTC trading above $100 000. However, historically, when spot volumes on Binance rise too quickly and too sharply, it has often coincided with local market tops.”

Bitcoin spot net volume delta. Source: CryptoQuant

Volume delta measures the difference in buy and sell pressure across candles, helping assess the underlying strength of bid and ask sides.

CryptoQuant suggests that investors throwing caution to the wind around breakouts contributes to unsustainable price spikes, and monitoring volume delta helps avoid disadvantageous market entries.

“Rather than being a warning sign, rising spot volumes at this point would be encouraging for market strength,” Darkfost continued.

“Tracking spot volumes can provide valuable insights into investor behavior, especially on Binance, which handles the largest share of global trading.”

Source: Cointelegraph

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