BTCUSD: Deeper correction, buy on dips.

Summary:
Bitcoin is facing selling pressure for the eighth consecutive week, currently striving to hold within the robust support area of $26,500. The cryptocurrency market cap remains close to $1.127 trillion as attempts for growth encounter selling pressure near $1.14 trillion.

The cryptocurrency market has once again brought disappointment to investors over the past week. Transaction fees within the Bitcoin ecosystem have reached the third highest level in history, similar to what was observed in 2017 and 2021. The average network speed remains around 7 transactions per second. Those wishing to transfer funds have increased transaction fees to expedite their execution, resulting in an average fee of $31 per transaction on May 8th. While this is frustrating for users, it is welcomed by miners as it marks the first time since 2017 that fees have exceeded block rewards.

With selling pressure nearing $1.14 trillion, the cryptocurrency market cap remains close to $1.127 trillion, leading to mixed performances among the top cryptocurrencies in the past 24 hours. Solana declined by 0.7%, XRP rose by 5.6%, Bitcoin dropped by 0.3%, and Ethereum showed moderate gains.

The strengthening US dollar has negatively affected Bitcoin. However, the potential for a US banking crisis continues to support hopes in the cryptocurrency market. For many cryptocurrency enthusiasts, Bitcoin is considered a safe haven and a store of value similar to physical gold, protecting against potential loss of funds.

Expectations of lower US interest rates and bank deposit rates are likely to generate more interest in stacking Ethereum and generate additional interest income. This could potentially initiate a new bullish trend in the cryptocurrency market. Nevertheless, it is worth noting that the price has failed to rally from the support level, currently approaching $27,000. Investors should be prepared for a price drop below the $25,000 level as the market appears ready for a comprehensive rebound and correction from the November lows. This also implies that the upcoming correction may be limited in scope.

BTCUSD: The price is expected to undergo a deeper correction, with buying opportunities focused on demand zones.

From a technical perspective, Bitcoin's price has been in a declining structure since reaching a 10-month high of $31,040 on April 14th, aligning with our expectations. In the short term, although the price seems to have stabilized above $26,000 and attempted a rebound, the inability to successfully test the demand zone remains a significant factor hindering further upward movement, indicating that the price continues to be in a bearish trend.

This trend suggests a downside bias in the near term. Specifically, the RSI remains below the neutral level of 50, while the stochastic oscillator is accelerating its decline near the oversold region of 20.

If the 20-day moving average continues to limit the upside, the price is likely to test the support level at $26,660, which represents a 38.2% Fibonacci retracement of the rally from $19,540 to $31,064. Breaking below this level would establish a basis for the May bottom at 25,785 points. If the bears fail to hold at this point, the price could continue to drop below the $25,000 level.

However, in a bullish scenario, the bulls may push the price towards the recent resistance zone around $27,670. Once this level is breached, the focus will shift to the 23.6% Fibonacci level at $28,344, and even potentially test the psychological level of $30,000.

Overall, Bitcoin's price has been in a bearish trend since mid-April, and its recent recovery attempts have been repeatedly rejected by the 20-day moving average. Therefore, a clear breakout above this level is needed to revive hopes for a trend reversal.

In terms of trading, considering the expected possibility of a price drop below short-term support and further acceleration downwards, the primary strategy is to buy on dips within the demand zones.