BTC price drops, downside target now $23K

Bitcoin (BTC) is currently trading near $28,000 as of May 28th, with traders being cautious about a potential full correction after the weekend surge in price.

BTC Shorts Increase as $28,000 Slips

According to data from Cointelegraph Markets Pro and TradingView, BTC/USD volatility has cooled down after a last-minute surprise caused some action around the weekly close.

As the United States markets were closed for the Memorial Day holiday, crypto markets were quieter than usual, with traders waiting for a Congressional vote on the proposed deal to extend the U.S. debt ceiling.

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Although Bitcoin was up 4.4% on May 28th, not everyone was convinced that bulls might now have the upper hand.

Popular trader Crypto Tony, who uploaded a potential BTC price roadmap to Twitter, called a move back to as low as $23,000 “still very much a possibility.”

“If we close back below $27,500, I will close my long and look for a short position,” he told his followers as part of the day’s updates.

Despite May 28th liquidating more positions than any other day in a month, trading suite DecenTrader noted that short positions were still increasing.

The #Bitcoin Long/Short ratio has been declining as price has gone up. This suggests a lot of retail traders on Binance are adding shorts. https://t.co/tWYEfdrggr pic.twitter.com/DjG2EIKRUp

— Decentrader (@decentrader) May 29, 2023

On-chain monitoring resource Material Indicators cautioned over dismissing the uptick as a fakeout.

“As someone who frequently uses the phrase #WildWestWeekend in #Crypto, I actually believe the #Bitcoin PA we’ve seen for the past few days is legit for multiple reasons including the fact that the bounce came from key technical support at the 200-Week MA, and the #DebtCeiling deal announcement,” part of commentary read.

Material Indicators referred to the 200-week moving average still acting as support, one of several such support points near $26,000 on traders’ radar.

An accompanying chart showed the Binance BTC/USD order book, with increasing bid liquidity entering at $27,000.

U.S. Dollar Works Overtime

Despite the Wall Street holiday, U.S. dollar strength continued to play out in a trend that formerly spelled significant headwinds for crypto asset performance.

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With the current trend forming something of an exception, Bitcoin brushed off a trip to 104.5 for the U.S. Dollar Index (DXY), the latter’s highest since mid-March.

“The Dollar has bounced lovely since the double bottom put in back in April,” Crypto Tony added about the index.

“My area of resistance I expect us to reject from is coming up at $105.80. Over the next few months though I do expect a strong dollar, but to roll over into next year.”

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