Bitcoin consolidates at $94K; analysts eye breakout amid US Fed uncertainty

Flagship cryptocurrency Bitcoin continues to trade within a narrow consolidation range, showing minimal price movement. Although it briefly climbed past $97,000, it has since slipped below $95,000 and was last seen trading around $94,338.87, lower by 0.42 per cent as of 11:31 AM on Tuesday, May 6.

 

According to CoinMarketCap, Bitcoin has fluctuated between $93,631.90 and $95,193.19 over the past 24 hours. The world’s most valuable cryptocurrency, with a market capitalisation of $1.87 trillion, recorded a 24-hour trading volume of $22.31 billion.

 

Implied volatility remains subdued ahead of the US Federal Reserve's interest rate decision scheduled for Wednesday night. Analysts note that Bitcoin's stagnant price behaviour reflects market caution in anticipation of the Fed's move.

 

 

Over the past two weeks, Bitcoin has lacked momentum in either direction. Despite the sideways action, Bitcoin dominance has steadily increased to 63.46 per cent, indicating a lower risk appetite among investors. This trend, according to Piyush Walke, Derivatives Research Analyst at Delta Exchange, suggests a 'flight to safety' as altcoins continue to underperform relative to Bitcoin.

 

“A breakout above $1,938 could signal a reversal, while a drop below $1,800 might lead to further declines,” said Walke, adding that the Relative Strength Index (RSI) is nearing oversold territory, which could indicate a short-term bounce.  ALSO READ | 'Bitcoin, Ethereum remained most traded cryptos amid stock market crash'

 

Edul Patel, co-founder and CEO of Mudrex, believes the crypto market is waiting for a clear catalyst to define its next move. He points to encouraging data from Glassnode, which shows that 88 per cent of Bitcoin supply is currently in profit. Losses are limited mostly to recent buyers in the $95,000–$100,000 range, suggesting reduced sell pressure and a potentially bullish setup.

 

"Bitcoin now faces resistance above $96,000, with firm support at $93,000," said Patel.

 

Ethereum (ETH), the second-largest cryptocurrency by market capitalisation, is showing signs of renewed momentum. On-chain data shows a 79 per cent surge in new addresses and an 11 per cent rise in active addresses, indicating increasing user engagement.

 

Continued weekly inflows into Ethereum ETFs, analysts said, also suggest sustained institutional interest. That said, ETH was last quoted at $1,803.61, lower by 0.54 per cent, with a trading volume of $10.93 billion.

 

Among other popular cryptocurrencies, Binance Coin (BNB) defied market trends and was trading higher by 1.24 per cent. Meanwhile, Ripple (XRP) was down 2 per cent, and Solana (SOL) declined by 1.24 per cent.

 

The US dollar-linked stablecoin Tether (USDT) traded at $0.9998, down 0.02 per cent.