At lightning speed, like most things in Bitcoin and the crypto space, the general sentiment in the market seems to have changed. The bears have taken over. The price of BTC has been bleeding and this time it suggests a bigger downside.
Many “bought the dip” when BTC was below $ 50,000 expecting a bounce over the weekend towards the familiar $ 58,000 area. The bounce has yet to come, and as some experts have pointed out, BTC could see more blood before experiencing a recovery.
As of this writing, BTC is sitting at $ 42,692 with a 9.4% loss 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 broke 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 claimed by Bitcoin expert Preston Pysh via Twitter, Bitcoin has seen similar corrections in the past. The expert has called the recent price action “business as usual” and a consequence of BTC’s compound annual growth rate (CAGR) of 200%.
As shown below, during 2016 and 2017 bull-fun, the price of BTC experienced at least 6 corrections from its yearly low towards, at that time, a new all-time high of $ 20,000. Corrections ranged from 38% to 29%.
Source: Preston Pysh
Bears Put Relentless Selling Pressure on Bitcoin
After losing 3 critical levels of support, Bitcoin needs to regain the area above $ 44,000 for a potential bounce to finally trigger. However, as the “pothole” trader has shown, the market faces relentless selling pressure. A whale on Bitfinex has been selling 100 BTC per minute with a short margin of 4,000 BTC. The merchant said:
This person alone has moved bitfinex -100bp, currently trading ~ $ 180 off cash (…). 7,091 btc has been taken out of the credit market in large blocks. It seems this guy takes out a chunk instead of letting the system nibble like his orders do. We’re talking ~ $ 300 million in exposure if all of these are added. Serious gamer who plays serious games.
This person has moved bitfinex -100bp on his own, currently trading ~ $ 180 off cash pic.twitter.com/AwgfuxQ2Jh
– lowstrife (@lowstrife) May 17, 2021
In the last hour, the entity that sells BTC on Bitfinex has increased the selling pressure to 200 BTC every minute before pausing.
CryptoQuant CEO Ki-Young Ju recorded a surge in BTC inflows over the past few days and classified the activity as “unusual.” Although Young Ju said that most of the funds have gone to the derivatives sector on Binance, he cautioned:
I don’t usually trade when a lot of entry alerts go off. I’m going to wait until the input signal cools down.
Source: Ki-Young Ju
Data from Glassnode suggests that the selling pressure could come from addresses with 1,000 BTC. This metric is at its lowest point in 10 months, falling from 2,500 to 2,150, as of this writing.
Additional data indicates that coins inactive for the past 5 years could have re-entered the market. The metric reached a 6-month high with 21.9% of this offering in motion.