Bitcoin (BTC) and the overall cryptocurrency market are once again under pressure. At press time, Bitcoin (BTC) is down 7.13% trading at $47,150 levels and market cap slipping below $900 billion. After taking a momentary dip below sub $44,000 levels last Sunday, February 28, Bitcoin (BTC) once again bounced to its all-time high above $52,000 levels but faced strong rejection.
The quick drying-up of the trading volumes shows that the Bitcoin bulls are exhausted while keeping the prices high. Also, institutional purchases seem to have dried up over with Grayscale Bitcoin Trust (GBTC) making now new purchase since February 16.
On-chain data provider Santiment notes that the divergence between falling volumes and the rising price is a warning that there are not enough participants in the market. “In coming days, we would like to see more trading volume else, it’s likely for the price to retrace back to where demand is,” adds Santiment.
The data provider compares the latest BTC price movement to the 26% drop in January. After it, it took almost a month to bottom out, and thus we might be entering the next consolidation period over the next month. Here’s a look at some of the crucial indicators.
Bitcoin Derivatives Market Cooldown
The Bitcoin derivatives market has cooled down after staying overheated last month. Moreover, despite the BTC price picking up to $51,000, the funding rate remains neutral over the last week. Thus, the price surge to $51,000 was more due to spot buying with positive whale indicators.
Fall In the Bitcoin Social Volumes
The Bitcoin (BTC) Social Volumes show a similar downward trend similar to the one we saw during the January correction. This shows that the interest in Bitcoin has waned out at the moment. Even during the price surge to $51,000, the interest levels didn’t pick up much giving warning bells.
“It’s very likely that majority of the crowd got burnt right at the top during the massive liquidation event that saw $4.4B wiped out,” notes Santiment.
The recent Bitcoin price correction also comes on the backdrop of global macros where investors are turning away from risk assets as the U.S. Treasury yields surge once again above 1.5% after Federal Reserve Chairman Jerome Powell’s Thursday speech.
The crypto market correction followed the U.S. stock market as Powell failed to assure investors that the Fed would keep rising bond yields and inflationary worries under check. As bulls drain out, our technical forecast shows Bitcoin (BTC) might take a dip to $42,000.
Good morning all.
Bitcoin in caution mode as global macro turns risk-off and the dollar rallies.
Both U.S. and Asia stock markets down bigly.
Expecting more consolidation in short-term. pic.twitter.com/gJGO6zETFC
— Joseph Young (@iamjosephyoung) March 5, 2021
The post Bitcoin (BTC) Tanks 7% As Bull Investors and Trading Volumes Are Exhausted, Consolidation Kick-In appeared first on Coingape.
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Source: https://coingape.com/bitcoin-btc-tanks-7-as-bull-investors-and-trading-volumes-are-exhausted-consolidation-kick-in/
