Bitcoin market has been facing downwards price action over the past couple of days. Even though data from on-chain metrics suggests that BTC over the long term looks positive, it also indicates that its short-term downside has just started. Bitcoin whales are moving their BTC to exchanges, suggesting that there might be further downside action in the near term.
The past two days had been quite challenging on the price of the world’s leading cryptocurrency, Bitcoin.
From a high of around $58,000 on May 12th, BTC started to drop rapidly from the $54,000-55,000 region following news that Tesla had stopped accepting the flagship cryptocurrency as payments for their electric vehicles.
The digital asset’s long-term momentum continues to weaken, which could further limit its price recoveries this weekend and into next week.
“If you’re a long-term BTC investor, don’t worry. Your portfolio is the same as institutional investors in the States. If you’re a derivative trader, be careful in the short-term. (Relatively speaking) whales are depositing BTC to exchanges.”
Another metric that indicates a bearish signal shows that whales and sellers have continued to offload BTC, despite failing to make a profit on their trades, indicating that sell-side pressure may lead to a breakdown in the price for BTC.
Despite the short-term losses, the on-chain metric signals a bullish pattern for the long term.
Data from CryptoQuant further suggests that stablecoin reserves on exchanges have continued to grow during Bitcoin’s recent price dip over the past couple of days. The larger these stablecoin reserves are on exchanges, the easier it will be for the cryptocurrency to climb out of the dip when upwards momentum returns, according to the data analysis firm.
Meanwhile, Bitcoin's Fear & Greed Index suggests that that the Bitcoin market is currently is in a state of fear, with the index at 26 basis points. Historically, this has been a good opportunity for a rebound.