Technical Analysis

Bitcoin Price Analysis – May 11, 2023

By LonghornFX Technical Analysis
May 11, 20233 min

Daily Price Outlook

Bitcoin's value initiated a resurgence, climbing above the $27,800 mark. BTC surpassed the resistance area of $28,000 and experienced a surge beyond the 100 hourly Simple Moving Average. The liquidity across Bitcoin trading pairs has been in a state of decline since FTX's downfall in November, failing to show signs of recovery.

The potential pullback or deceleration in trading activities by key cryptocurrency market makers, Jane Street and Jump Crypto, could potentially pose a threat to the already fragile liquidity stream in the industry, Kaiko analyst suggests.

Bloomberg reported on Tuesday that in the wake of FTX's November default, Jane Street and Jump are scaling back their crypto trading operations in the United States. However, Jump's crypto division is set to continue expanding globally, while Jane Street's expansion plans are slated for downsizing.

"The news does not come as a surprise, given recent developments," Kaiko analyst Riyad Carey told CoinDesk. "It's noteworthy that liquidity has not yet rebounded from Alameda's downfall, and a slowdown by two of the leading market makers could further dampen liquidity. It's astonishing how long the industry has taken to fill the void left by Alameda."

Market depth, an indicator used to measure the capital required to influence market movements on exchanges, witnessed a decline of more than 50% following FTX's collapse and has yet to bounce back despite a surge in crypto prices.

Crypto-native market makers, unlike traditional firms such as Jane Street and Jump, are not dissuaded by the duo's withdrawal, as the issue appears to be confined to the US market. Let's take a look at the technical side of the market now.


Bitcoin (BTC/USD) – Technical Outlook

At present, Bitcoin is trading approximately at $27,500. It observed a sharp ascension to the $28,250 mark, yet faltered to surpass it, resulting in a dramatic plunge to $26,800. Nonetheless, the downturn was ephemeral, with BTC regaining its footing and presently fluctuating within a tight range of $27,327 to $28,800.

The technical indicators present a mixed picture, with BTC prices oscillating both above and below the 50-day exponential moving average, currently posing resistance around the $27,550 mark. In the same vein, the RSI and MACD indicators are straddling a buying and selling zone, with the RSI under 50 and MACD over 0, thereby indicating a sense of investor indecision regarding the market trajectory.

If BTC breaches the $27,300 mark, it could potentially descend to $26,900 or even $26,500. Conversely, should BTC maintain its position above the $27,300 level, it could potentially rebound to $27,800 or $28,250.


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