Bitcoin’s value dropped by 3.84% in the past 24 hours, settling at $58,291.31 on May 1. On-chain data from CryptoQuant, as reported by Cointelegraph, suggests that this decline is a result of both decreasing enthusiasm among dedicated investors and an increase in bearish speculations.
In April, demand from long-term Bitcoin holders, who buy and hold without selling, decreased by 50%. The number of BTC held by these holders fell from over 200,000 BTC in late March to approximately 90,000 BTC by the end of April. This decline in holding behavior is similar to what was seen in early March when Bitcoin experienced a significant correction of 7% after reaching all-time highs.
The report also points out a slowdown in demand for spot Bitcoin ETFs and an increase in short positions in the futures market as contributing factors to the recent price downturn. Traders are becoming more hesitant to take extensive positions, with sell orders surpassing buy orders.
Furthermore, Bitcoin’s funding rate has reached its lowest level of the year, indicating that traders are less willing to finance long-term engagements. This hesitance is reflected in the increase in short position activities as traders anticipate further declines in Bitcoin’s value.
Analysts from CryptoQuant have observed that these corrections in the Bitcoin market are often driven by a decrease in demand from large investors, known as whales. The recent trends suggest a cautious or bearish outlook among these significant stakeholders, which affects overall market sentiment.
Market analysts predict a continued decline in Bitcoin’s value, with record-breaking lows in the coming months. After failing to sustain the crucial $60,000 threshold, experts believe that the depreciation will continue.
Renowned market analyst Scott Melker sees the current financial turbulence as a temporary moderation within a larger bull trend. He notes that the daily Relative Strength Index (RSI) has not yet indicated oversold conditions and predicts that Bitcoin will reach around $52,000 in the near term.
Tuur Demeester, another prominent Bitcoin analyst, has observed Bitcoin trading at $60,409. He suggests that with the critical support level of $60,000 breached, the next target could be $50,000. This aligns with the broader market sentiment of further declines.
Trader and analyst Mags further emphasizes the bearish outlook, highlighting the significance of weekly closing prices. If Bitcoin closes below $60,000 on the weekly chart, Mags warns of a potential significant retracement. His analysis suggests that Bitcoin’s price could drop to $40,000 or even lower.
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Bitcoin (BTC)
BTC Analysis
