Bitcoin tests higher support line, investors take profits after weeklong rally

After a week-long rally by Bitcoin and altcoins, investors took some profits off the table on Thursday. Bitcoin tested a new support line, which was quite high already. The possible inclusion of Coinbase in the S&P500 could give the crypto market a new boost.

Dollar

The geopolitical agenda at the moment revolves around a possible peace deal between Russia and Ukraine, a still weak dollar and markets that have overcome the april slump.

Bitcoin continues to trade at very high levels and there are signs that we could be entering an alt season.

After a rally last week, investors took some profits on Thursday, causing the smaller altcoins (Solana, XRP and Dogecoin) to record strong losses. The market then stabilized again.

“We are in a highly volatile market where, despite the overall bullish sentiment, thin liquidity continues to amplify price movements. Even relatively small trading volumes can drive significant price changes. This also explains why higher-cap coins like Bitcoin and Ether are less affected, while lower liquidity assets experience more pronounced swings,” Kirill Kretov at CoinPanel explained.

Resistance

The cryptocurrency market’s recent surge was part of a broader upswing for risk assets, which was spurred on by positive economic signals. US inflation data came in a bit below forecasts, which again raises the expectation that the Federal Reserve will have to intervene. Meanwhile China’s tech sector reported robust earnings, fueled by optimism over renewed U.S.-China trade relations. These factors pushed Bitcoin to a temporary top of $104,000 and Ethereum to a top of $2,700 before both encountered resistance.