Investors faced a challenging month in May as Bitcoin’s price took a significant hit, marking its worst month since the last cryptocurrency downturn. With a decline of 8% by the end of May and a 6% drop this quarter, some may wonder if now is the right time to acquire more Bitcoin.
However, amidst this downturn, there is a glimmer of hope. BTC’s weekly chart finally showed some positive movement after days of stagnant prices. According to CoinMarketCap, Bitcoin’s price increased by over 2% in the last seven days, reaching $26,890.89. The market capitalization also stood strong at over $521 billion. Recent data suggests that the upward trend might not last long due to growing selling pressure.
Bitcoin experienced a substantial sell-off, the fifth largest of the year, primarily driven by Coinbase’s sale of over $400 million worth of BTC. This sell-off indicated the presence of significant selling pressure in the market. Santiment’s data supported this observation, showing an increase in BTC’s supply on exchanges while the supply outside remained relatively unchanged—a bearish signal.
Furthermore, the influx of Bitcoin into exchanges spiked, further intensifying the possibility of a price decline in the coming days. Sentiments surrounding the leading cryptocurrency also took a hit as BTC’s weighted sentiment decreased after a surge on May 29. This shift indicated a prevailing negative sentiment within the market. Despite this, BTC maintained a strong social dominance, emphasizing its popularity among crypto enthusiasts.
CryptoQuant’s data revealed that BTC’s net deposits on exchanges were higher than the previous week, reinforcing the selling pressure narrative. Notably, miners also joined in selling their holdings, as evidenced by Bitcoin’s Miners’ Position Index (MPI) being in the red zone, indicating an increased selling activity compared to the one-year average.
Considering the bearish indicators, it is highly likely that Bitcoin may undergo another price correction. The Moving Average Convergence Divergence (MACD) signaled the potential for a bearish crossover, and the Relative Strength Index (RSI) showed a downtick, raising concerns. However, the Money Flow Index (MFI) exhibited a slight increase, which could be viewed as a positive sign.
Therefore, this period before the next bull rally may present a favorable opportunity for investors seeking to accumulate more Bitcoin. It’s essential to consider the current market conditions and the various indicators suggesting a potential price decline before making investment decisions.
