FX.co ★ Technical Analysis of BTC/USD for June 2, 2021

Crypto Industry News:

Blockchain Bitcoin charges a fee for each transaction and distributes the proceeds to the miners. Charges increase when the demand for transaction processing exceeds the miners supply. On April 21, average fees hit a record high of $ 62.8 per transaction.

Conversely, charges go down when mining supply exceeds demand. The drop in fees suggests that bitcoiners are not as keen on trading as they were just over a month ago.

This could have something to do with the recent crash in the cryptocurrency markets, which saw the price of BTC drop from $ 60,000 to $ 36,000 in just a few weeks.

Bitcoin miners also seem to be less interested in processing transactions anymore. Mining difficulty - the amount of computing power needed to verify transactions in the network - fell by 16% on Sunday. This is the biggest drop in over a year. Mining bitcoin becomes easier as the overall computing power supporting the blockchain decreases.

Due to the overall cooling of the cryptocurrency market, fees on the Ethereum network have also dropped. According to CoinGecko data, global cryptocurrency market capitalization has fallen from last month's high of around $ 2 trillion to the current level of $ 1.6 trillion.

Lower prices, fees, and mining power appear to follow from government efforts to mine bitcoin in China, where most miners are based. The cryptocurrency exchanges Huobi and OKEx have already begun to restrict some transactions, and officials in Inner Mongolia are considering banning BTC mining altogether.

Technical Market Outlook:

The BTC/USD pair volatility has decreased significantly, but the bulls are climbing higher step by step. The momentum is still hovering around the neutral level of 50, but is not dropping lower and the price is still seen around the short-term trend line resistance. The market still trades under the supply zone located between the levels of $43,1459 - $41,794, so bears are still in full control of the market and only a strong breakout above the level of $41,096 (38% Fibonacci retracement of the last wave down) would temporary change the outlook to bullish. The next target for bears is May 19th low seen at the level of $29,701.

Weekly Pivot Points:

WR3 - $58,682

WR2 - $52,643

WR1 - $41,961

Weekly Pivot - $35,513

WS1 - $25,163

WS2 - $18,359

WS3 - $7,655

Trading Recommendations:

Even despite the recent correction the bulls are still in control of the Bitcoin market, so the up trend continues and the next long term target for Bitcoin is seen at the level of $70,000. Any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $30,000 is clearly broken on the daily time frame chart (daily candle close below $30k).