Bitcoin (BTC) Price Pulls Back After Record Weekly Close Amid Escalating Macro Fears

Key Takeaways

• Bitcoin’s (BTC) price reached its all-time high on May 22.
• The BTC price trades inside an ascending parallel channel.
• Will BTC break down from this channel and start a correction?

After climbing steadily since April 7, Bitcoin reached a record high of $111,980 on May 22.

However, the unbroken ascent was disrupted last week as volatility crept back into the market.

The first jolt came after former President Donald Trump threatened to impose a 50% tariff on all European Union imports, triggering a sharp 3% drop in Bitcoin’s price within an hour.

Adding to the turbulence, crypto trader James Wynn, known for outsized positions, closed a $1.25 billion long bet on BTC over the weekend at a $13 million loss.

He then reversed his position to short, only to close that trade with another $16 million loss. Wynn later announced he was stepping away from leveraged futures trading.

This week’s Bitcoin Conference , running from May 27 to 29, could inject new momentum into the market. Whether it’s enough to halt the pullback remains to be seen. Let’s break down the charts.

Mixed Long-Term Outlook

Bitcoin’s weekly chart paints an uncertain picture.

Last week’s candlestick formed a Dragonfly Doji, a pattern known for its long upper and lower wicks with a narrow body.

While typically neutral, a Doji at the top of an uptrend often signals waning momentum.

On the bullish side, the long lower wick confirmed $104,500 as a key support level.

Once a major resistance during Bitcoin’s climb to new highs, this zone now appears to be holding as support, a promising sign for bulls.

But technical indicators are split. The Relative Strength Index (RSI) remains above 50, and both the RSI and MACD have formed a bullish cross, often a signal of continued upward momentum.

However, both indicators have generated bearish divergences (orange), a strong sign of a bearish trend reversal.

With conflicting signals from price action and momentum tools, Bitcoin’s next move remains uncertain.

Bitcoin Teeters at Support as Trend Signals Split

Bitcoin’s daily chart isn’t offering much more clarity than the weekly view.

Since the rally began on April 7, BTC has traded within an ascending parallel channel, a pattern often associated with corrective moves that resolve with a breakdown.

However, with the price recently hitting a new all-time high, that bearish assumption may no longer hold.

Still, pressure is building. A breakdown from the channel could come as soon as today.

If that happens, immediate support sits at $102,000, with stronger Fibonacci support near $97,750.

Technical indicators give mixed readings. The RSI and MACD are falling and the latter made a bearish cross (black circle).

However, neither has generated any bearish divergences. On the contrary, the RSI has created its third hidden bullish divergence (orange).

The first two led to significant upward movements. It is still unclear if the present one (dashed) will do the same.

With conflicting momentum cues and key support levels in play, Bitcoin’s short-term trajectory remains uncertain.

A breakdown is still on the table, but so is another push higher.

What’s Next for Bitcoin’s Price?

While the price action is undetermined, the wave count leans bearish.

The bearish count suggests the BTC price completed a five-wave upward movement (green) since April.

Wave five extended, and the sub-wave count (black) indicates it has finally ended.

If this is the case, the BTC price will correct in an A-B-C correction.

Since waves two and four were shallow, the entire correction could end at the first Fibonacci support at $103,250 or $97,750.

As for the short-term count, there are two possibilities for the future movement. One is that Bitcoin is completing a flat corrective structure.

If this is the case, the first portion of the decrease is already over, and Bitcoin’s price has started wave B (red). The sub-wave count is in black.

Since the first decline has a three-wave structure, wave B will approach the all-time high and possibly break out.

The proposed movement would create a running or irregular correction, fitting with the pattern of shallow corrections.

The bearish alternative suggests that the BTC price is near the top of wave B, after which another decline is likely.

While corrections have had a short duration, this would be extremely short relative to the upward movement, making it slightly less likely.

If this happens, the entire correction could develop into a more complex structure, leading to another eventual low.

In any case, the long-term Bitcoin price analysis remains bullish, with the current decline being only a short-term drop in the larger bullish structure.

Short-Term Trend Unclear

The Bitcoin price reached a new all-time high on May 22, closing above the previous long-term resistance.

After validating it as support, the Bitcoin price confirmed its long-term bullish trend.

However, the short-term trend leans bearish. While the rally could continue with vertical accumulation, BTC may correct toward $102,00 and $97,750 before resuming higher.