The mid-week calm was sharply broken as soon as bitcoin fell below the $30,000 mark. While you may feel the urge to blame world events or broader market factors for this decline, you would be advised to think again. Strange moves are afoot, and their waves could be the trigger for the latest drop in the price of bitcoin.
Quarantine time?
At press time, bitcoin was changing hands at $29,815.23 after a drop of 2.16% over the past 24 hours. It has also declined by 3.14% in the last one week. Most obvious reason?
Well, the increasing exchange supply could be a factor. Since May 15, bitcoin is returning to crypto-exchanges, which has naturally created a kind of selling pressure.
Additionally, sentiment data showed that dormant bitcoin addresses have been waking up for the past week. This could mean that investors who previously practiced the hands-off approach may decide to cut their losses and sell their coins.
Although Bitcoin’s Edge Consumed Metric increased on 14 May, it also saw an increase on 17 May.
I #bitcoinDormant addresses have become more active this past week, especially during a major capitulation drop last Thursday and Friday. In general, when consumption increases in age during a fall in prices, it is related to a position of exit from weak hands. https://t.co/JJszcumkjx pic.twitter.com/EAuMeQCjDl
— sentiment (@santimentfeed) 17 May 2022
What could be the cause of this? One analysis points directly to Luna Foundation Guard (LFG). In a May 16 report, Glassnode said,
“Bitcoin traded down 21.2% to $26,513 amid the stablecoin transition, and the weight of $3.275 billion of bitcoin sold by LFG.”
LFG held 80,394 BTC on May 7. However, at press time, the data showed 313 BTC. This is no small level of bearish pressure.
fall price
Since LFG is still having a major impact on bitcoin flows, it can be difficult to predict where the coin is going to go next. However, there is some good news for the bullish market from both the indicators.
For starters, Awesome Oscillator [AO] flagging off. Although they were below the zero line, the presence of four bars indicated bullish momentum. However, a red candle was taking shape at press time.
what’s more? relative volatility index [RVI] Entered price slightly above 50 – another sign that future volatility could move bitcoin price north.
Therefore, LFG is struggling to boost TeraUSD. [UST] And with “weak hands” exiting their positions, investors should keep an eye on what bitcoin does next.