Bitcoin trapped at the $82,000 wall, will the Clarity Act vote tomorrow kick off a $160,000 rally?

▲ Bitcoin (BTC) ©Godasol

Bitcoin (BTC) is currently trapped below a strong resistance level of $82,000, with downside risks and long-term optimism in a tight standoff. This week's major regulatory legislative outcome in the US is expected to be the biggest turning point in determining the future direction of the market price.

According to investment specialized media TradingNews on May 13 (local time), Bitcoin (BTC) is currently trading around $81,400, facing strong resistance from the 200-day Exponential Moving Average (EMA) formed at $82,000. The recent two-week period of condensed volatility, trapped within a narrow range of around 2%, signals an imminent sharp price breakout in one direction or another. In particular, the outflow of $233.25 million from US spot Bitcoin ETFs last Tuesday has dampened short-term investor sentiment, raising concerns about the potential breakdown of the $80,500 support level.

Technical analysts diagnose Bitcoin as currently being in a typical 'waiting zone.' If it successfully breaks above $82,000 on a closing basis, it could accelerate its ascent past $85,000 to the $97,000 mark. Conversely, if it fails to hold the $80,500 level, there's a possibility of an additional decline of approximately 24% down to the February low of $61,000. The Relative Strength Index (RSI), currently at 61, suggests ample room for further upside, but the Moving Average Convergence Divergence (MACD) shows slight weakness, indicating a somewhat dampened short-term breakout momentum.

The macroeconomic environment is also exerting conflicting pressures on Bitcoin. As the US Producer Price Index (PPI) surged by 1.4% month-over-month, fueling inflation concerns, the 10-year Treasury yield soared to a 10-month high of 4.48%. While this could be a long-term positive for Bitcoin as an inflation hedge, in the short term, it strengthens the dollar, suppressing risk asset prices. Furthermore, market uncertainty is heightened this week, coinciding with the Federal Reserve's leadership change on Friday, as Chairman Jerome Powell hands over the baton to incoming Chairman Kevin Warsh.

Nevertheless, long-term fundamentals are stronger than ever. Bitcoin held by companies worldwide amounts to 1,846,271 BTC, or 9.2% of the circulating supply, and institutional adoption is further advancing, with Japan's Metaplanet issuing Bitcoin-based preferred shares. Particularly, historical statistics indicating a 77% probability of reaching a new all-time high within 12 months, based on analysis of past patterns of a 50% decline followed by a 35% recovery, lend strength to the optimists' arguments. VanEck has presented $160,000 as a conservative price target based on the Buffett Indicator, while Tiger Research targets $143,000.

Ultimately, the immediate fate hinges on the outcome of the Clarity Act vote scheduled for this Thursday at the Senate Banking Committee. If this bill, which aims to provide regulatory clarity, successfully passes, it could trigger an explosive rally, breaking through the 200-day EMA with a powerful short squeeze (buying pressure generated to close or cover short positions). Experts advise that rather than entering prematurely within the current narrow price range, it is more advantageous to wait for confirmation of Bitcoin's stabilization above $82,000 or its ability to hold the $80,500 support level before taking action.

According to CoinMarketCap, at the time of reporting, Bitcoin's price is $79,605, down approximately 1.3% over the past 24 hours.

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