According to Cointelegraph: Bitcoin (BTC) Price Correction: Three Signs Point Towards a Possible Bottom
A combination of the Federal Reserve’s recent minutes release, indications of Bitcoin (BTC) miners’ resilience, and a rising demand for stablecoins in China implies that Bitcoin (BTC) may be nearing its price floor.
Bitcoin (BTC) experienced a significant price drop between April 30 and May 1, falling by 11.5 % to $56,522. This caused $172 million of leveraged long position liquidations, which stands out as relatively low given the $28.9 billion open interest in Bitcoin (BTC) futures immediately before the price crash.
Market uncertainty is expected to settle following the publication of the Federal Reserve's minutes. Economists and investors are holding their breath as Jerome Powell, the chairperson of the US Federal Reserve, navigates the two-day monetary council meeting. Notwithstanding the expectation that interest rates will remain steady at 5.25%, questions remain about the ability of the U.S. Treasury Department's capacity to finance government expenses.
Decreasing value in the Russell 2000 Index coupled with a downturn in WTI oil prices also signifies growing risk-aversion among investors. However, the general outlook for Bitcoin has become more optimistic following robust Q1 corporate earnings.
Despite the recent halving of Bitcoin miners' rewards, there's negligible evidence of miner capitulation. This threw into focus the resilience of Bitcoin miners, staying at bay from selling despite a significant drop in the Hashrate Index.
An increase in the demand for stablecoins in China, particularly USD Coin (USDC), is another signal for an improving market sentiment. The rising premium for USDC transactions in China exemplifies a robust demand for converting the Chinese yuan into USDC.
However, as always, there remains some degree of uncertainty. In the US, for instance, net outflows from US-listed spot exchange-traded funds amounted to $635 million over the past five trading days. All eyes are now turned towards the support level at $56,500, which represents a crucial test for the market's trajectory.
