As a seasoned crypto investor with a keen interest in on-chain data and market trends, I’ve closely followed the recent Bitcoin (BTC) price drop of 5.42% over the last 24 hours to hit a new multi-week low at $57,151 on May 1. The reasons behind this decline are multifaceted, with a slowdown in demand growth and increased open short positions being the primary factors, according to reports from reputable sources like CryptoQuant.
The price of Bitcoin (BTC) decreased by 5.42% within the past 24 hours, reaching a fresh low of $57,151 on May 1. According to on-chain analysis, the decline could be attributed to a deceleration in Bitcoin’s demand growth and an increase in open short positions. It’s plausible that the price may continue to fall further for BTC.
According to CryptoQuant’s analysis, Bitcoin’s recent price drop can be attributed to a decrease in permanent holder demand, signified by a slowdown in the growth of their Bitcoin balances. Additionally, there has been a decline in spot Bitcoin ETF purchasing, and an uptick in investors taking on short positions in the futures market.
The amount of Bitcoin held by unwavering investors, or those who buy Bitcoin but do not sell it, decreased by half according to CryptoQuant’s data. This decline occurred around April, dropping from approximately 200,000 BTC in late March down to around 90,000 BTC.
“Accelerating demand growth is needed for prices to bottom and eventually rally significantly.”
As a crypto investor, I’ve noticed that the metric displayed in the chart has mirrored early March levels where Bitcoin underwent a significant correction. Consequently, a sudden 7% decline followed right after it surpassed its record highs.
As a researcher studying whale behavior and cryptocurrency markets, I’ve noticed a decrease in demand from whales for whales since late March. Similarly, based on my analysis using CryptoQuant, I’ve found that price corrections in Bitcoin (BTC) often stem from reduced demand from large investors.
“Bitcoin whale demand growth (purple area) peaked at a monthly growth rate of 12% in late March and has now slowed down to 6%.”
As an analyst, I’ve observed that the decrease in Bitcoin demand was reflected in dwindling acquisitions from U.S. spot Bitcoin Exchange-Traded Funds (ETFs). This trend further intensified selling pressure on the cryptocurrency market.
As an analyst, I’ve observed a significant decrease in daily Bitcoin purchases through Exchange-Traded Funds (ETFs). This drop has brought us down to almost zero transactions currently, following a peak of over $1 billion in mid-March. To fuel further demand growth, it is essential that we witness a new surge in Bitcoin acquisitions via ETFs.
The on-chain analysis company attributed the decrease in Bitcoin demand based on their data to the reluctance of traders to pay higher prices to initiate long positions, with a larger volume of sell orders compared to buy orders.
As a researcher studying the Bitcoin market, I’ve observed that the funding rate has reached its lowest point this year. This observation suggests that traders are currently less eager to pay the premiums they once did to enter into long position contracts.
As a researcher, I would express it this way: “Traders have instigated a surge in short positions, predicting that prices will continue to drop.”
Analysts agree that downside is the likely direction for Bitcoin price
Market participants are pondering the potential lows of Bitcoin’s price during this market correction, eagerly waiting for a possible trend change.
As a researcher studying market trends with CryptoQuant, I’ve observed that our team has identified a lower target price range between $55,000 and $57,000. This is approximately 10% below the current cost basis of traders, which is currently at $63,000. Historically, the cost basis of traders has acted as a supportive factor during bull markets.
“The current Bitcoin price is already below traders’ cost basis.”
According to well-known analyst Scott Melker, the Bitcoin price may not fall below $52,000 in the near future. Melker explained that, given the current state of the bull market, the recent correction has not been severe enough for the daily Relative Strength Index (RSI) to become oversold yet.
“This is still only a 23% correction, very shallow for a bull market and consistent with other corrections on this run. We are yet to see a 30-40% pull back during this bull market, like those of the past.”
As a researcher following the cryptocurrency market closely, I’ve noticed Bitcoin’s price reaching $60,409. With the loss of the crucial $60,000 support level, it seems plausible that Bitcoin could head towards the next significant resistance at $50,000.
As a researcher studying the cryptocurrency market, I’ve observed that trader and analyst Mags has expressed a cautionary viewpoint. If Bitcoin fails to close above $60,000 on the weekly chart, according to his assessment, we may be in for a more substantial correction. This potential downturn could extend to the $40,000 mark or even dip further.
“In this cycle so far, we have seen 4 pullbacks between 20-22%. If we witness something similar, a -22% correction from the local high would put us at $58,000 – $57,500.”
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2024-05-02 00:41