In a flash, like most things in Bitcoin and the crypto space, general sentiment in the market seems to have changed. The bears took over. The price of BTC has bled and this time suggests a further downside.
Many “bought the dip” when BTC was below $ 50,000 expecting a rebound over the weekend to the notorious $ 58,000 area. The bounce will still happen and, as some experts have pointed out, BTC could see more blood before it heals.
At the time of writing, BTC stands at $ 42,692 with a loss of 9.4% in the daily chart and a correction of 30% in the monthly chart. Lower time frames move sideways with a 10% loss in the daily chart as the price of BTC broke below 3 critical support levels at $ 47,000, $ 45,000 and $ 43,000.
As an expert on Bitcoin Preston Pysh asserted via Twitter, Bitcoin has seen similar corrections in the past. The expert called recent price activity “as usual” and a consequence of the compound annual growth rate (CAGR) of 200% of BTC.
As described below, during 2016 and 2017 bull fun, the price of BTC saw at least 6 corrections from its annual low to, at the time, a new all-time high of $ 20,000. Corrections ranged from 38% to 29%.
The Bears Constantly Sell Pressure on Bitcoin
After losing 3 critical support levels, Bitcoin needs to reclaim the area above $ 44,000 for a possible rebound to finally kick off. However, as a “lowstrife” trader has shown, the market is facing relentless selling pressure. A whale on Bitfinex sold 100 BTC every minute with a short margin of 4,000 BTC. The merchant said:
This person alone moved bitfinex -100bp, currently trading ~ $ 180 discount to spot (…). 7091 btc were taken out of the loan market in large blocks. It seems like this guy is taking out a block instead of letting the system bite like his commands. We’re talking about $ 300 million in exposure if these are added. Serious player playing serious games.
This person alone moved bitfinex -100bp, currently trading a ~ $ 180 discount to spot pic.twitter.com/AwgfuxQ2Jh
– low (@ low) May 17, 2021
In the last hour, the entity selling BTC on Bitfinex increased the selling pressure to 200 BTC every minute before a break.
Ki-Young Ju, CEO of CryptoQuant, recorded an increase in BTC entries over the past few days and classified the activity as “unusual”. Although Young Ju said most of the funds went to the derivatives sector in Binance, he warned caution:
I don’t usually trade when a bunch of incoming alarms sound. I will wait until the input signal cools down.
Glassnode data suggests the selling pressure could come from addresses with 1,000 BTC. This metric is at its lowest point in 10 months dropping from 2,500 to 2,150, at the time of writing.
Further data indicates that inactive currencies over the past 5 years could re-enter the market. The metric reached a 6-month high with 21.9% of this stock on the move.