Bitcoin Eyes $27K Support as Whales Face Thin Liquidity

Bitcoin (BTC) appeared poised to surrender the $27,000 support level on May 17, with traders anticipating further declines.

BTC/USD 1-hour candle chart on Bitstamp. Source: TradingView

Whales encounter low liquidity

Data from Cointelegraph Markets Pro and TradingView indicated that BTC/USD was trading near $26,800 at the time of writing.

The pair had crossed the $27,000 mark multiple times the previous day, with that level now forming a low-timeframe focal point at risk of breaking down.

BTC/USD annotated chart. Source: Crypto Tony/ Twitter

“3 wave up into resistance, followed by a retest and a rejection off resistance zone,” popular trader Crypto Tony summarized regarding recent market activity.

He added that a potential target to watch was now $26,400.

Trading account TraderSZ had previously predicted that an “expansion candle” would form if the breakdown continued.

$BTC daily. Looks like it’s breaking down. If correct we should get big down expansion candle soon. https://t.co/MAV2GY6mKn pic.twitter.com/24GXaMJPXR

— TraderSZ (@trader1sz) May 16, 2023

“Small long flush early in the morning,” another prominent trader, Daan Crypto Trades, noted.

“On the Bybit futures chart we can see how asks were filled and from there on out spot pushed price down to take out the longs that accumulated in this mini range. Overall still choppy and no clear direction.”

Analyzing the order book setup on Binance, monitoring resource Material Indicators highlighted an overall lack of liquidity.

The largest-volume traders, it revealed, had reduced their activity to a minimum, possibly due to the absence of coins exposing them to potential slippage.

Liquidity on both sides of #Bitcoin price is so thin that whales have to either break up their market orders into smaller order sizes to minimize slippage or wait for pockets of liquidity before smashing buttons.
Cranked the Volume Percentile filter way down to see how and… pic.twitter.com/dpXddCKgiX

— Material Indicators (@MI_Algos) May 16, 2023

Zooming out, however, the prevailing narrative for many remained the concept of “choppy” price action continuing.

The current trading range, which has served as a key support and resistance zone since 2021, showed no signs of relinquishing control.

“For the next few days I expect price action to be choppy between $27.2k – $26.5k,” Titan of Crypto wrote in one such market appraisal.

BTC/USD annotated chart. Source: Titan of Crypto/ Twitter

$25,000 BTC price target in stocks comparison

While maintaining a long-term bullish outlook, trading group Stockmoney Lizards offered a potential downside target of $25,000 for the day.

Related: Bitcoin trader eyes CME gap with $24K BTC price dip target in play

Acknowledging the “head and shoulders” formation playing out during April—a bearish signal reported previously—it also presented the 25-week simple moving average (SMA) as a possible support line.

The 25-week SMA stood at just $23,100 on the day but was set to rise toward a potential retest in June.

BTC/USD annotated chart. Source: Stockmoney Lizards/ Twitter

A separate post nonetheless characterized the overall shape of price performance as a “well-known” pattern, referencing similar moves in United States equities in previous years. These moves ultimately resulted in a break to the upside.

#Bitcoin
is attempting to retest the neckline in this well-known chart pattern. pic.twitter.com/e6YtBYBRvt

— Stockmoney Lizards (@StockmoneyL) May 17, 2023

Magazine: Alameda’s $38B IRS bill, Do Kwon kicked in the assets, Milady frenzy: Asia Express

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.