These 3 Trends Show There’s Downside Ahead for Bitcoin, Even After 5% Drop

These 3 Trends Show There’s Downside Ahead for Bitcoin, Even After 5% Drop

After holding within the high-$9,000s for days on finish, Bitcoin lately exhibited some weak point uncharacteristic to the current uptrend. The cryptocurrency fell from the $9,800 help degree to $9,100 in a transfer that liquidated $40 million, with BTC plunging on fears of Satoshi Nakamoto liquidating his cash.
Bitcoin worth chart from Chart exhibits the cryptocurrency’s Wednesday crash on the again of hypothesis concerning Satoshi Nakamoto’s BTC holdings.
Approximately 50% of the drop has since been recovered, with Bitcoin now buying and selling at $9,475 as of the time of this text’s writing.
Yet there are three telltale technical and elementary indicators signaling that cryptocurrencies might maintain extra losses.
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#1: There Are Many Bitcoin Sellers With ~$10,000 Asks
According to order guide information, there’s nonetheless pronounced sell-side stress above Bitcoin’s present worth, in and round $10,000.
One dealer made this clear when he shared the chart beneath, displaying clear ask-side orders within the “10,000 and 10,700 area” on Bitfinex.
Chart from Livercoin
These promote orders could not look like a lot from a macro perspective. What’s a number of dozen million in a market price dozens of billions? But the final time Bitcoin noticed a promote wall much like the present one, it crashed.
As reported by NewsBTC beforehand, on May ninth BTC encountered a powerful $30 million promote wall that existed from $10,010 to $10,230. What adopted was a $2,000 crash within the two days after the promote wall appeared.
#2: On-Chain Metrics Signal a Contracting Network
Three out of seven of IntoTheBlock’s metrics are at present “bearish,” indicating that the underlying Bitcoin community is contracting alongside worth. This corroborates the sentiment that there’s a downtrend forming.
On-chain information for Bitcoin from blockchain intelligence agency IntoTheBlock. The information exhibits that the cryptocurrency is “largely bearish” from an on-chain perspective.
#3: Bitcoin Investor Sentiment Is Extremely High
To put a cherry on prime of the proverbial crypto cake, evaluation has discovered that Bitcoin investor sentiment is spiking.
Data shared by crypto analytics startup The TIE indicated that their proprietary Bitcoin social media sentiment indicator (30-day common) lately reached the “highest” it has been “since 2017.” 2017, after all, was when the cryptocurrency hit $20,000.

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Bitcoin's sentiment (30 day common) is the best that we’ve got recorded since 2017.
30 day common tweet volumes on Bitcoin are additionally at 2020 highs.
— The TIE (@TheTIEIO) May 18, 2020

While some would argue that this means there’s elevated demand for cryptocurrency, this isn’t precisely the case.
As could be seen in The TIE’s chart displayed above, there have been quite a few events through which the expansion of The TIE’s sentiment indicator marked the highest of rallies. For occasion, the final time the indicator was on this vary as on the peak of Bitcoin’s false aid rally from $6,000 to ~$9,500 in 2018.
The correlation isn’t excellent per se, nevertheless it does present that when Bitcoin traders get too overzealous, the value tends to drag again as sensible cash sells into the FOMO.
Related Reading: Crypto Tidbits: Bitcoin Halving, Reddit Using Ethereum, JP Morgan Dabbles in Crypto
Featured Image from Shutterstock


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