We take a look at Bitcoin price for the week of June 6, 2021. Aside from fundamentals around Elon Musk, we rely heavily on technical analysis to assess overall sentiment. This is achieved by identifying key support and resistance levels that traders and investors will be watching in the short term. Based on the current price action, what should you watch for next week?
At the time of this report, Bitcoin’s price is currently hovering around $35,888. The largest cryptocurrency by market cap is up ~ 3.3% over the last week. Despite these minimal gains, BTC has fallen ~ 36.4% over the last month. Elon Musk and his tweets continued to be the center of attention within the BTC community.
— Elon Musk (@elonmusk) June 4, 2021
This was not taken lightly, especially since many investors were betting on Musk being a prominent figure in Bitcoins maturation. The reverse in sentiment comes after Tesla’s CEO decided in January to invest corporate cash into Bitcoin. Bitcoins price then accelerated to $60,000 levels in March after Tesla decided to accept BTC for vehicle purchases.
This sentiment has started to evaporate with Elon second-guessing Bitcoins infrastructure. After Tesla stopped accepting crypto for its vehicles in May due to environmental concerns, investors now wonder if Elon’s recent “BTC break-up meme” on Twitter means that Tesla will dump its $1.5B BTC investment.
Bitcoin Technical Analysis
In a recent Bitcoin analysis from Visionary Financial, we outlined $39,000 as being a key resistance level. It was believed that BTC would continue to draw down if $39,000 could not be slashed. We have seen that play out throughout the week with Bitcoin price flirting with $35,000 levels. Due to the weak price action, we have adjusted key support and resistance levels to watch next week.
The $39,000 resistance level we mentioned last week was rejected, which was a bearish signal. This is why we focus on strong support and resistance levels in the short term. If traders/investors bought Bitcoin at $39,000, they would have experienced a significant loss over the last few days.
Based on the current price action, we have raised key resistance to $39,300. We will remain bearish until this level is breached. We believe there could be too much short-term risk to confirm bullish sentiment before this level is slashed.
While remaining bearish in the short-term ( unless the scenario above plays out ), we will be watching $33,000 support. If Bitcoin rejects this level, we could see another strong leg down.
The sentiment is still pretty dull right now, especially after yesterday’s announcement in which El Salvador plans to become the first country to adopt Bitcoin as legal tender. Price did much of nothing following this development.
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