Bitcoin is failing to establish a clear direction. Its recent rebound has been capped near the 200-day moving average.

As of May 17, CoinPost reported that bitcoin was trading around $77,900 after the previous week’s upward trend eased.

Early last week, reports that U.S. President Donald Trump rejected an Iranian proposal to end the war heightened caution over geopolitical risks. That pushed bitcoin into a heavy tone from the outset. Risk appetite later revived as AI-related stocks strengthened in U.S. equities and expectations for a U.S.-China summit were reflected in markets.

Profit-taking gained the upper hand as bitcoin in dollar terms neared the 200-day moving average, viewed as a long-term trend inflection point. From May 12, it gradually gave back gains around $80,600. On the same day, U.S. consumer price index data came in above market expectations, adding concerns about overheating inflation.

U.S. producer price index data also came in far above market expectations. Inflation worries again weighed, pushing bitcoin back into the $78,000 range. After the CLARITY bill passed the U.S. Senate Banking Committee on May 14, markets took it as a supportive factor. Bitcoin surged back into the $81,000 range, but the 200-day moving average also acted as resistance there.

Market participants are expected to focus next week as well on the battle around the 200-day line. Bitbank analyst Yuya Hasegawa (하세가와 유야) said the 200-day moving average is strongly seen as an inflection point for the long-term trend. He added that if the price clearly breaks above the line, expectations could grow that it is exiting the downtrend. He said selling from positions bought at past peaks can also easily emerge in this area, making a breakout difficult without additional catalysts.

On regulation, attention has turned to the possibility that the CLARITY bill could move to deliberation in the full Senate. The bill is expected to advance to full Senate deliberations, but a specific schedule has not been set. Still, with talk that discussions could progress in June, an assessment is emerging that it has taken a step toward enactment within the year. Easing regulatory uncertainty could be a medium- to long-term support factor for the bitcoin market.

Supply and demand is also a variable. In the perpetual futures market, short positions continue to build at higher price levels. That has raised the possibility that volatility could expand sharply with a short squeeze if bitcoin clearly moves above the 200-day line. It means that if an upside breakout is confirmed, changes in positioning could accompany more than a simple technical rebound.

In the short term, the presence of additional catalysts is important. U.S. equities are currently supported by optimism around AI and expectations for a U.S.-China summit, but the perception that markets are overheating could gradually re-emerge, which is also a burden. In this situation, if positive progress is confirmed in a U.S.-China summit or in Middle East conditions, the scenario of bitcoin breaking above the 200-day line could gain strength. If new bullish factors are lacking, bitcoin is likely for the time being to continue moving sideways at elevated levels, with gains capped near the 200-day line.

Bitcoin is expected for the time being to seek direction centered on whether it breaks above the 200-day moving average. Expectations of easing regulatory uncertainty and risk appetite are acting as supportive factors, but inflation worries and profit-taking remain burdens. The market is expected to assess additional upside momentum while watching a U.S.-China summit, Middle East conditions and U.S. inflation data.