2023-6-14 23:03 |
The past week has brought forth a series of regulatory uncertainties and price drops for Bitcoin and other cryptocurrencies.
Over the past seven days, the largest cryptocurrency by market capitalization lost slightly over 4% following an intense battle initiated by the U.S. Securities and Exchange Commission against the world’s two largest crypto exchanges.
Amidst this tumultuous period, on Sunday, May 11, on-chain analytics firm Glassnode reported significant Bitcoin outflows from miners to exchanges providing further evidence to support the ongoing sell-off. As per the firm, Bitcoin miners sent many coins to exchanges in the past week, with the largest inflow reaching $70.8 million. However, although this represents the third-largest inflow on record, it falls short of the peak inflow of $101 million witnessed during the primary bull market in 2021, the firm said.
However, despite these negative aspects, other on-chain metrics offered a more optimistic outlook for Bitcoin. JA Marrtuum, an analyst at Cryptoquant, highlighted the continuous decline in exchange reserves, indicating a decreasing supply of Bitcoin available for trading. Notably, this trend contributes to the narrative of increasing scarcity, which historically has been a catalyst for price appreciation.
He also noted that the percentage of Bitcoin held by long-term holders remains steady compared to previous cycles. According to him, this suggests that despite short-term market volatility, a significant portion of Bitcoin holders remains confident in the long-term prospects of the cryptocurrency.
When we analyze Bitcoin from an on-chain perspective, it appears to be in excellent shape. In fact, it looks better than ever before,” said Marrtuum adding, “If you still have doubts, remember the old saying in the stock market: “When in doubt, zoom out.” When we take a broader view of the situation, it looks fantastic.”
From a technical analysis standpoint, Bitcoin’s price is currently hovering around a critical support level. Analyst “Captain Faibrik” highlighted a falling wedge pattern, emphasizing the importance of defending the crucial trendline support. According to the pundit, Bitcoin bulls need to regain the $27,000 resistance level for bullish momentum to start. However, if the major trendline support is not maintained, there is a possibility of a bearish rally of approximately 15% in the coming days, he warned.
Another analyst, “Cryptocator,” focused on the short-term outlook for Bitcoin, emphasizing key levels to watch. He says channel resistance at $27,200 and support at $25,400 are crucial price levels. Failure to hold the support could lead to a further drop to $24,800 or $24,700. However, he said a break above $26,300 might signal a potential recovery.
At press time, Bitcoin was trading at $25,886, up 0.21% in the past 24 hours, according to CoinMarketCap data.
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