In a flash, like most things in Bitcoin and in the crypto space, the general sentiment in the market seems to have changed. The bears have taken over. The price of BTC was bleeding and this time it indicates another downward trend.
Many bought the dip when BTC was below $ 50,000 and expected a bounce towards the familiar range of $ 58,000 over the weekend. The jump hasn’t happened yet, and as some experts have pointed out, BTC could see more blood before it recovers.
At the time of writing, BTC is trading at $ 42,692, down 9.4% on the daily chart and a 30% correction on the monthly chart. Lower time frames are moving sideways with a 10% loss on the daily chart as the price of BTC was below 3 critical support levels at $ 47,000, $ 45,000 and $ 43,000.
BTC with potential bearish momentum on the daily chart. Source: BTCUSD Tradingview
As Bitcoin expert Preston Pysh claimed on Twitter, Bitcoin has seen similar fixes in the past. The expert has described the latest price action as “business as usual” and a consequence of the average annual growth rate (CAGR) of BTC of 200%.
As shown below, the price of BTC saw at least 6 corrections in 2016 and 2017 from its annual low to a new all-time high of $ 20,000. The corrections varied between 38% and 29%.
Source: Preston Pysh
The bears are putting relentless selling pressure on Bitcoin
After losing three critical levels of support, Bitcoin must recapture the area above $ 44,000 for a potential upswing to finally set in. However, as the trader’s “lowstrife” demonstrated, the market is facing relentless selling pressure. A whale on Bitfinex was selling 100 BTC every minute with a short margin of 4,000 BTC. The dealer said:
This person moved Bitfinex -100bp single-handedly and is currently trading at a discount of ~ 180 USD against Spot (…). 7091 btc were withdrawn from the credit market in large chunks. Looks like this guy is taking a piece out instead of letting the system nibble the way it commands. We’re talking about $ 300 million exposure when all of these are added. Serious player who plays serious games.
This person has single-handedly moved Bitfinex -100bp and is currently trading at a discount of ~ $ 180 to spot pic.twitter.com/AwgfuxQ2Jh
– lowstrife (@lowstrife) May 17, 2021
For the past hour, the company selling BTC on Bitfinex has been increasing the selling pressure to 200 BTC every minute before taking a break.
Ki-Young Ju, CEO of CryptoQuant, has seen a surge in BTC inflows in the past few days and has rated the activity as “unusual”. Although Young Ju said most of the funds went into the derivatives sector in Binance, he cautioned caution:
I usually don’t trade when I get a series of inflow warnings. I will wait for the influx signal to cool down.
Source: Ki-Young Ju
Data from Glassnode suggests that the selling pressure may come from addresses at 1,000 BTC. This metric is at its lowest point in 10 months and is falling from 2,500 to 2,150 at the time of writing.
Additional data suggests that inactive coins from the past 5 years may have come back on the market. The metric hit a 6 month high with 21.9% of that supply on the move.