The number of liquidated traders has neared 100,000 on a daily scale as the total value of liquidations skyrocketed to over $350 million in the same timeframe. This comes as BTC and the rest of the market have plunged once again.
- As CryptoPotato reported, the past week or so was quite calm in terms of trading for bitcoin and the altcoins. The primary cryptocurrency stood around the $30,000 mark with a few attempts to overcome that level but to no avail.
- Each rejection was met with a minor retracement that ultimately drove the asset back down to just under $30,000.
- However, the situation worsened in the past 24 hours. BTC started dumping hard and just a few hours ago went all the way down to $28,000. This became its lowest price point since the previous massive crash on May 13.
- The altcoins are suffering even more. Ethereum is 10% down on the day and struggles below $1,800 after touching $2,100 two days ago. Binance Coin is down to $300, while Solana, Polkadot, Avalanche, NEAR Protocol, Chainlink, and quite a few others have declined by double digits.
- Somewhat expectedly, this enhanced volatility has caused pain for over-leveraged traders, according to data from Coinglass.
- The overall liquidations are up to $370 million as of writing these lines on a 24-hour scale. The number of liquidated trades is just shy of 100,000. The most substantial individual loss came on OKX (worth $3 million), and it involved the trading pair – ETH/USDT.
Altcoins continue bleeding out as the majority of the market takes another leg down in the past 24 hours. This has caused Bitcoin’s dominance to spike to highs that we haven’t seen since last year.
- Ethereum’s price relative to that of Bitcoin has dropped to its lowest point since last year.
- At the time of this writing, ETH trades at around 0.0629 BTC. The last time it was this low was on October 22nd, 2021.
- Meanwhile, today’s pullback saw ETH’s dollar value plunge 7%, leaving some $86 million in liquidated positions.
- As a matter of fact, over the past 24 hours, the most liquidations were of ETH contracts. The largest single liquidation order took place on OKEx, and it was an ETH-USDT swap with a face value of $2.24 million – according to Coinglass.
- As CryptoPotato reported earlier today, ETH’s decline comes amid a broader market pullback where altcoins are bleeding out.
- This led to a considerable increase in Bitcoin’s dominance – the metric that gauges BTC’s share relative to that of the entire market. At the time of this writing, it’s at its highest point since October last year as well.
Bitcoin’s price could be getting closer to a local bottom according to at least one on-chain indicator. This comes as the cryptocurrency is trading in a tight range of around $30K for quite a while.
- The bitcoin price is currently sitting at around 57% below its all-time high reached in November last year.
- According to one technical indicator – namely, the long-term output profit ratio (LTH-SOPR), the bottom may be getting closer.
- The LTH SOPR is calculated as the USD value of spent outputs at the spent time divided by the USD value of spent outputs at the created time. In other words – the realized value is divided by the value at the time of creation.
- Data from CryptoQuant reveals that the current 7-day SMA LTH SOPR sits at 0.72, which means that some of the long-term holders could be selling at a loss.
- The last time the LTH-SOPR dropped to the levels seen recently was back during the COVID crash in March 2020. Back then, however, its value dropped to 0.53, meaning that there might still be some pain ahead.
- According to the CryptoQuant analyst, this “doesn’t mean the bottom is in but it’s worth observing this metric.”
- Elsewhere, the cryptocurrency fear and greed index remains in the “extreme fear” territory. The metric is used to gauge the current market sentiment and according to it, investors remain particularly fearful at this time.
With the price of bitcoin currently below $30,000, Scott Minerd, the chief investment officer of global investment giant Guggenheim Partners, believes BTC’s value could further dip to $8,000.
Bitcoin Price Could Bottom at $8,000
Minerd made the bearish prediction on Monday (May 23, 2022), during an interview on CNBC’s Squawk Box at the World Economic Forum (WEF) annual meeting in Davos, Switzerland.
According to the Guggenheim executive, bitcoin’s constant slip below the $30,000 level could cause the cryptocurrency to fall to $8,000, which signals a fall of more than 70%. Minerd said:
“When you break below 30,000 [dollars] consistently, 8,000 [dollars] is the ultimate bottom, so I think we have a lot more room to the downside, especially with the Fed being restrictive”.
According to a recent report by CryptoPotato, bitcoin has continued to close the weekly candle in red for eight consecutive weeks. The cryptocurrency’s price decline has led to the BTC Fear and Greed Index to remain at “extreme fear.”
Meanwhile, this is not the first time the Guggenheim CIO has predicted bitcoin’s price dip. Back in July 2021, Minerd said that BTC could plunge to $15,000. In April of the same year, the executive predicted bitcoin’s price could correct to $20,000, at the time when the asset was at $65,000, before retracing to around $55,000.
However, Minerd earlier made bullish predictions stating that bitcoin could reach between $400,000 and $600,000. It’s worth noting that he has seen little-to-no success with his previous forecasts.
MicroStrategy CEO and founder Michael Saylor, on the other hand, continues to make bold predictions for bitcoin despite the crypto price descent. According to Saylor, who has remained unfazed in the ongoing cryptocurrency market bloodbath, he expects BTC to “go into the millions.”
No Dominant Player in Crypto Yet
Despite the Guggenheim CIO’s recent bearish BTC price prediction, the executive said that only bitcoin and ethereum, two of the largest cryptocurrencies by market capitalization, will survive long term. Minerd noted that most crypto assets are “junk” rather than currencies.
Even with BTC and ETH dominating the market, the CIO believes that crypto is yet to have a dominant player. Minerd went on to add that there is no “right prototype yet for crypto.”
According to the executive, the ideal cryptocurrency will need to be a medium of exchange, a store of value, and a unit of account. However, Minerd believes most of the existing crypto tokens fail to pass any of the criteria.
Despite reclaiming the $30,000 mark late last night, bitcoin still closed the weekly candle in the red. Thus, the cryptocurrency extended its negative streak to eight consecutive weeks.
8 in a Row in Red
A lot can change in the cryptocurrency space in two months, and it definitely did for bitcoin. The asset stood close to $50,000 at the end of March, and when the community expected a run towards that level, the landscape changed, BTC reversed its trajectory and headed for its longest-negative weekly streak.
CryptoPotato reported two weeks ago when bitcoin equaled the previous adverse record with six red candles in a row. Last week, it broke it after dumping by $15,000 at one point, and the situation worsened upon the weekly closure hours ago.
Bitstamp data, showcased by TradingView, shows that BTC closed the week at just over $30,000, making eight straight weekly candles in the red.
The start of the new trading week has been slightly more positive, with bitcoin currently in the green. However, there’s still time for the bears to return to the scene and extend the negative streak ever further.
Extreme Fear Dominates the Scene Again
With eight red ones in a row, it’s somewhat expected that the BTC Fear and Greed Index has remained stuck well within “extreme fear” territory. The metric compiles various types of data, including surveys, volatility, social media comments, etc., to determine the general sentiment toward the primary cryptocurrency, with results ranging from 0 (extreme fear) to 100 (extreme greed).
It’s safe to say that it’s been a while since the community has been greedy. In fact, the highest the Index has gone this year was around 50 during the aforementioned run-up in late March.
It went to “fear” in April and early May but plummeted into “extreme fear” once bitcoin dumped from $40,000 to $25,300 in days. As of now, it’s still in the latter, showing 10.
Currently, the price is consolidating inside a crucial demand zone. However, considering the current global markets’ sentiment and recent price action, it’s too early to label the present region as the bottom.
Technical Analysis By Shayan
The Daily Chart
Despite the recent equilibrium in the $29-30K range, the price might simply be forming a mid-downtrend consolidation pattern before another leg to the downside.
On the other hand, the daily RSI attempts to break above a mid-term descending trendline. If this plays out, a relief correction could take place in the short term. The first significant supply zone, in any upward movement, would be the $37-40K range (on the daily timeframe).
The 4-Hour Chart
On the lower timeframes (LTF), Bitcoin is forming a wedge pattern and will decide on its next direction upon breaking out of the wedge.
If the wedge gets broken down, a bearish expansion phase will be the most likely scenario for the following few weeks. On the other hand, a bullish breakout might signal a reversal, pushing Bitcoin’s price to the $34K critical resistance level.
Furthermore, on the 4-hour timeframe, the RSI has reached its resistance trendline and is struggling to break it. The reversal scenario will be imminent if this breakout occurs.
Onchain Analysis By Shayan
The following chart shows the price of Bitcoin and the percentage of UTXOs that were last active over a year ago.
As can be seen below, the percentage of coins that have been dormant for more than a year has just reached a new all-time high. This indicates that long-term investors have been careless about the previous weeks’ price fluctuations and continue holding their bitcoin.
This behavior indicates on a possible supply shock; however, demand must enter the market in order to increase the chance for a bullish reversal.
The frantic price action in the cryptocurrency market does not seem to faze the uber-bullish billionaire CEO of tech firm MicroStrategy. Michael Saylor has yet another bold prediction for Bitcoin, even as his favorite cryptocurrency struggles to hold on to the $30,000-mark.
The exec, who started to build up his Bitcoin reserve in 2020, reiterated his stance that he is in for the long-term, and his strategy is still the same – to buy and hold the world’s largest cryptocurrency.
Michael Saylor’s Bold Prediction
Owing to countless Bitcoin purchases, the Saylor-led business intelligence firm, MicroStrategy, is still the largest corporate holder of the cryptocurrency, with 129,218 BTC. Its enormous BTC position is currently slightly in red, sitting at approximately $70 million unrealized loss at the time of this writing.
However, there is no shaking Saylor’s confidence, who assured that there is no price target at which MicroStrategy will begin liquidating its BTC holdings. Even as the market-wide meltdown evaporated trillions of value, the leading Bitcoin maximalist and his company is patiently holding firm.
During an interview with Yahoo Finance Live, Saylor was quoted saying,
“There’s no price target. I expect we’ll be buying bitcoin at the local top forever. And I expect Bitcoin is going to go into the millions. So we’re very patient. We think it’s the future of money.”
Bitcoin – Future of Money?
Terra and UST’s destructive downward spiral was a huge blow that further cracked investor confidence. According to Saylor, this event will spur efforts to regulate stablecoins and security tokens.
The executive of the Nasdaq-listed software company also believes this drawdown and the subsequent regulation will, in fact, be “good for the industry.” Ultimately, when the dust settles, people will realize that Bitcoin is superior to the thousands of existing crypto-assets, argued the proponent.
“Once people figure out why bitcoin is superior to everything else, then the institutions are going to come in with large sums of money, and we’re not going to have to struggle through this massive explanation of why we’re different than 19,000 other crypto tokens.”
The MicroStrategy exec also affirmed that Bitcoin is the future of money, but to scale up to its ability to achieve billions and billions of transactions, it needs to have an “ethically, economically, and technically sound” base layer and second layer like Lightning Network.
Despite the relative calmness in the market, the price action is not showing signs of a robust recovery. Although the US stock closed yesterday with a green candle and the DXY index has gone down for the past three days, Bitcoin has not been successful in stabilizing above the critical $30K level. Fear and doubt still dominate the market.
The Daily Chart
The Binance-Futures price and order-book chart are shown below on the daily timeframe.
Considering the historical trends over the last two years, the upward trends usually have been accompanied by an increase in the Volume Delta, which indicates the dominance of takers-buy pressure alongside an increase in the Directional Trend Index (in blue). On the other hand, downward trends have often occurred with divergence in the Directional Trend Index and the dominance of takers-sell pressure (in red).
Throughout this week, the takers-sell pressure has been gradually diminishing. To some extent, takers-buy orders have also entered the market (not significantly), which has caused histogram bars to turn green in the volume delta. But the directional trend index is still moving below the red line, indicating the trend’s weakness.
Suppose the taker buyers start to buy aggressively, and the directional trend index breaks the red line and the blue one. In that case, the reversal of the trend will be confirmed according to this strategy. Otherwise, BTC is likely to remain bearish as there are no signs of a turnaround.
Key Support Levels: $28,700 & $25,400
Key Resistance Levels: $31,700 & $32,900
The 4-Hour Chart
On the 4-hour timeframe, the bullish structure shows some weakness in its last wave. If the bulls can hold the previous higher low at $29K and then push the price above the red resistance zone, it can be expected that an uptrend momentum will be formed in the short term. Otherwise, the lower levels might likely be tested again.
Bitcoin currently struggles with 4H MA50 (as resistance) at $ 29K. The RSI indicator is also moving up in the bearish zone and is close to the baseline, confirming the lack of bullish momentum.
Definition: The difference between coins flowing into and out of the exchange. (Inflow – Outflow = Netflow). A positive value indicates the reserve is increasing due to net inflow.
- For spot exchange, a high value indicates increasing selling pressure.
- For derivative exchange, a high value indicates possible high volatility.
BTC inflow into the Coinbase exchange in the last two days has exceeded the outflow. Just the same way that the withdrawal of 29493 bitcoins from the Coinbase on May 14 caused a short-term uptrend, one must be careful about this particular inflow to Coinbase and reduce the risk according to any unusual regime of significant inflows.
Last week’s rollercoaster continues to impact the cryptocurrency market in one or more ways, as IntoTheBlock data indicated that approximately 40,000 BTC had made their way into exchanges since May 11. While this has increased the selling pressure, there’s some good news since bitcoin actually managed to remain above $28,000, which was a pivotal mark.
40K BTC Deposited to Crypto Exchanges in a Week
After weeks of being unable to break above $40,000, bitcoin reversed its trajectory last week amid the Terra-Luna-UST fiasco and slumped by $15,000 at one point to its lowest price position since late December 2020 at $25,300.
This led to mass panic in the markets, with the Fear and Greed Index showing the most intense levels of “extreme fear” since the COVID-19 collapse.
Naturally, many investors rushed to deposit their holdings in exchanges, typically regarded as a bearish development. According to data from IntoTheBlock, about 40,000 BTC were sent to trading platforms. The analytics platform asserted that this coincided with “the downwards sell pressure that we have been experiencing.”
Despite this increased selling pressure, though, the company revealed that bitcoin “has been able to sustain above $28K.” Moreover, the cryptocurrency even spiked to above $31,000 a few days ago but was unable to continue upwards.
$BTC deposit into exchanges has increased dramatically since May 11th.
Roughly 40,000 BTC has been spotted as inflows into exchanges. This coincides with the downwards sell pressure that we have been experiencing.
— IntoTheBlock (@intotheblock) May 18, 2022
Retail Bought the Dip
During such extreme cases of enhanced volatility, in which BTC loses more than 30% of its value in days, retail investors typically flock the scene. However, this doesn’t seem to be the case this time, shows more data from IntoTheBlock.
Addresses holding BTC for less than 30 days started increasing on May 8 and have continued to do so. The company admitted that these entities usually “follow the price action and sell at a loss, but they increased their balance from 1.47m BTC to 1.78m BTC in 7 days.”
Retail has been buying the $BTC dip.
The balance held by traders – addresses holding <30 days, has been increasing since May 8th.
These addresses historically follow the price action and sell at a loss, but they increased their balance from 1.47m BTC to 1.78m BTC in 7 days. pic.twitter.com/qhluqo8QDj
— IntoTheBlock (@intotheblock) May 18, 2022
It’s worth noting that it wasn’t just retail who bought the dip this time. El Salvador, the first nation to legalize BTC, accumulated 500 more of the asset during the most recent pullback.
Shares of the Grayscale Bitcoin Trust are trading significantly below BTC spot prices as the asset circles around $30K. Since the beginning of the year, GBTC is down some 45%.
- Grayscale is the world’s leading digital asset manager, and its Bitcoin Trust is the company’s flagship product.
- It allows investors to receive exposure to the price of BTC without having to worry about safekeeping it. Eligible shares are also quoted on OTCQX – the top marketplace for trading stocks over-the-counter.
- The minimum investment requirement is set at $50K, and each share represents 0.00092439 BTC.
- At the time of this writing, obtaining BTC through GBTC shares is roughly 27% cheaper than buying it on the open markets.
- As mentioned above, since the beginning of the year, GBTC plunged by some 45%, whereas the BTC spot price is down only about 34% – a considerable discrepancy.
- Grayscale tends to be used as a reference for institutional demand, and with the discount being as large as it is, a somewhat plausible assumption could be that the latter is currently at a low point.
- Of course, it’s also worth mentioning that GBTC shares come with a 6-month lock-up.