The impressive week-long bull rally in Bitcoin [BTC] came to an abrupt end when its daily chart went red in the past few hours. The price of the cryptocurrency dropped between May 16 and 17, after going up more than 4% over the course of the week. This happened because there was a sell warning on its price chart.
This event makes us look more closely at Bitcoin’s current state and the possible short-term trends.CoinMarketCap says that Bitcoin’s value steadily went up and reached a high point of $66,000. The sell warning, on the other hand, stopped this upward trend and caused the price to drop.
Ali, a well-known crypto expert, pointed out this change in a tweet and said that BTC would have one to four candlestick corrections. His prediction came true, as BTC’s price dropped by 0.71%, reaching $65,464.76 at the time of writing. Its market value is now over $1.29 trillion.
Bitcoin’s Data Analysis
CryptoQuant’s data was looked at to see how long this stop in BTC’s rise would last. The adjusted Spent Output Profit Ratio (aSORP) for Bitcoin was in the red, which means that more buyers are selling at a profit. When there is a bull market, this kind of trend often means that the market has reached its peak.
Bitcoin’s Net Unrealized Profit and Loss (NUPL) also showed that buyers are in a “belief” phase because they have a lot of unrealized profits. Usually, this time comes before either long-term gains or a market correction.
More information from analysts showed that most people in the market were selling. Bitcoin’s net deposits on platforms were higher than the average for the last week, which shows that there is more pressure to sell. The data from Glassnode supported this negative view. Bitcoin’s accumulation trend score is very low at 0.0061, which means that investors are not actively buying more BTC.
According to how much Bitcoin someone holds, the Accumulation Trend Score shows how big an entity is compared to others that are collecting coins on the blockchain. If the score is close to 1, it means that accumulation is strong. If the score is close to 0, it means that distribution or lack of accumulation is strong.
Analysts’ study of BTC’s 4-hour chart gave us more information about Bitcoin’s chances of starting its bull rally again. At the time this was written, Bitcoin was trying to break through $65,600. If the price breaks above this mark, it could mean that bullish behavior is coming back.
The Bollinger Bands showed that BTC was trading above its simple moving average (SMA) for 20 days, which is a sign that the price is going up. The Relative Strength Index (RSI), on the other hand, went down, which means that BTC might have a hard time breaking through its support in the near future.
