Bitcoin price analysis for May

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the outdoors, enjoys… read more.
on May 7, 2021
  • Institutional demand continues to grow significantly
  • Goldman Sachs announced this week the formation of a new crypto dedicated team
  • Maybe it is not the best time to invest in Bitcoin(BTC)

The cryptocurrency market is advancing this Friday, Bitcoin is trading very close to $58000, and for now, everything indicates that the price could advance above this level very soon.

Fundamental analysis: Institutional demand continues to grow significantly

Bitcoin continues to enjoy the support of both developers and user communities while the fundamentals of this cryptocurrency are constantly improving. Bitcoin has stabilized above $50000 support, the daily volume of this crypto remains high, and Bitcoin continues to grow following an influx of new capital into the market.

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The cryptocurrency market continues to attract “big players”, eBay is considering a crypto payment option while Mastercard and Visa made improvements to integrate cryptocurrencies into their payment networks. Goldman Sachs announced this week the formation of a new crypto dedicated team and two derivative products: Bitcoin NDFS and CME Bitcoin Futures.

The Crypto trading team will be a part of Global Currencies and Emerging Markets (GCEM) and a centralized desk for managing cryptocurrency risk for the clients of Goldman Sachs. Goldman Sachs entered in partnership with Cumberland DRW in order to make the best solutions for its clients.

“Institutional demand continues to grow significantly in this space, and being able to work with partners like Cumberland will help us expand our capabilities. The new offering is “paving the way for us to evolve our nascent cash-settled crypto-currency capabilities,” said Max Minton, Goldman’s Asia-Pacific head of digital assets.

JP Morgan and Morgan Stanley have also started to offer Bitcoin exposure for their institutional clients, proving that even big players like have confidence in the future of Bitcoin.

Despite this, the price of this cryptocurrency can weaken in the upcoming weeks, and maybe it is not the best time to invest in Bitcoin(BTC). If bigger investors unexpectedly sell a substantial amount of Bitcoin, it could result in an extreme correction as a small price change could provoke liquidations from traders with high leverage.

The risk/reward ratio is not good currently, and my opinion is that there are lots of cryptocurrencies with more opportunities.

Technical analysis: The major trend remains bullish

According to technical analysis, Bitcoin could advance above the $60000 resistance in the upcoming days or even hours.

Data source: tradingview.com

The main trend of this cryptocurrency remains bullish, and for now, there is no signal of the trend reversal. If the price jumps above $58000 again, it would be a signal to trade Bitcoin, and the next price target could be around $60000.

On the other side, if the price falls below $50000 support, it would be a firm “sell” signal, and the next target could be around $45000.

Summary

Bitcoin has successfully attracted the attention of institutional investors this year, and according to the latest news, Goldman Sachs announced the formation of a new crypto dedicated team and two derivative products that include Bitcoin NDFS and CME Bitcoin Futures. Bitcoin could advance again above the $60000 resistance; still, if the price falls below $50000 support, it would be a firm “sell” signal, and the next target could be around $45000.

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