Forex Analysis & Reviews: 27.05.2025 - BTC/USD Analysis on May 27,...

27.05.2025 10:53 AM

BTC/USD Analysis on May 27, 2025

The wave pattern on the 4-hour BTC/USD chart has become more complex. A corrective downward structure completed its formation around the $75,000 level. After that, a fairly strong upward move began, which could be the start of an impulsive bullish trend. The second wave of this segment appeared very short and unconvincing, but demand for Bitcoin continues to grow—an indicator of a "pump."

The news background supports Bitcoin, though not always and not consistently. I would say that market participants interpret any news in favor of the leading cryptocurrency—or simply ignore the news altogether and keep buying. We are witnessing the formation of a new bullish trend segment, driven by emotion, demand, and belief in Bitcoin's future sky-high value. One way or another, Trump's tariffs and the risks of economic slowdown no longer frighten crypto traders. Previously, such factors would trigger investor flight from risk assets. Now, Bitcoin is seen as a "safe haven from Donald Trump's policies."

BTC/USD has significantly increased in value over the past seven weeks, with demand rising steadily and consistently. Miners can't produce enough coins to meet the ever-growing demand. If you try to link this movement to the news background, it's hard to find a clear explanation. What, for example, drove MicroStrategy's latest Bitcoin purchase? What motivated all of MicroStrategy's previous purchases—other than the belief that Bitcoin will be worth millions in the future? Market participants don't currently need any news from the Fed or Donald Trump to keep buying.

Moreover, demand is now mainly coming from institutional players who can make long-term investments and are not particularly concerned about the current policy stance of the Fed or Trump.

In my view, the most surprising thing about the current price surge is the complete absence of pullbacks. There are simply no corrective waves. And I continue to believe that this is a sign of a "pump"—an artificial inflow of money into the asset without solid reasons or justifications. Bitcoin is once again being labeled a safe haven—from recession, from Trump's foreign policy, from inflation, from everything. But in my opinion, these are just attempts to explain what's happening in the market. I see the next pump target around $120,000, which corresponds to 127.2% Fibonacci. I strongly doubt that even a new escalation of the trade war could halt Bitcoin's rise.

That said, I want to remind everyone that Bitcoin has often experienced sharp declines throughout its history. These drops are, again, driven by market participants themselves. If an asset can no longer rise, it's better to dump it, crash the price, and then buy back at lower levels to profit again. Bitcoin is a speculative asset, and institutional traders can move the price with their volume.

General Conclusions

Based on the BTC/USD analysis, I conclude that the construction of the bullish wave structure continues, but its nature and fundamentals are highly unusual. What concerns me most is the almost complete absence of corrective waves, which makes wave analysis very difficult. In other words, it's extremely hard to determine what part of the trend the instrument is currently in. I don't particularly like such movements—they may look attractive, but they're much more dangerous than those resembling classical wave structures.

On the higher wave scale, a bullish trend segment is currently being formed, but its internal wave structure is highly ambiguous due to the near-total lack of corrections.

Core Principles of My Analysis:

Wave structures should be simple and clear. Complex structures are hard to trade and often prone to change.
If you're unsure about the market situation, it's better to stay out.
There can never be 100% certainty about the direction of movement. Always use protective Stop Loss orders.
Wave analysis can be combined with other types of analysis and trading strategies.

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*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.