Bitcoin drops 1.5% in US open market as warning miners could ‘capitulate’ in months

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Bitcoin (BTC) fell in line with US stocks on May 31 as Wall Street’s comeback began with a whimper.

BTC/USD 1 hour candle chart (Bitstamp). Source: Trading View

Stocks drive BTC price south

Data from TNZT Markets Pro and TradingView showed BTC/USD recovering to near $31,000 at the start of trading after markets returned from a holiday.

This move mirrored that of equity indices, with the S&P 500 losing 1.1% at the open and the Nasdaq Composite Index trading down 1%.

With volatility in evidence, pre-existing suspicions about the resistance of Bitcoin’s recent rise remained vocal among social media commentators.

“It is not unlikely that stocks will give back some of their gains from the past week,” analyst Jan Wuesterfeld wrote in the latest edition of his Bitcoin Market Intelligence newsletter for the day.

“In my mind, if that happens, Bitcoin will likely also give away some of the gains made over the weekend and Monday (reconnect in this case).”

Others focused on irrelevant long-term price signals. Kevin Svenson, a contributing analyst at on-chain analytics platform CryptoQuant, pointed to Bitcoin’s 20-month exponential moving average (EMA) as a source of possible future conflict.

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“In previous cycles, Bitcoin spent 6 -> 13 months below 20m/EMA after falling below. We have just experienced our first month below 20m/EMA right now,” he said. Explain.

“If human emotion repeats itself, then we will be below 20m/EMA until (at least) November 2022…and 13m is May 2023.”

BTC/USD 1 month candle chart (Bitstamp) with 20EMA. Source: Trading View

“No trend” of distribution by minors

A potential silver lining for Bitcoin came in the form of miner behavior.

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Related: “Mega Bullish Signal” or “Real Breakdown?” 5 things to know about Bitcoin this week

Amid warnings that the cost price of miners is now above the market, create With the threat of capitulation similar to the bear market low of 2018, the data suggested panic had yet to set in.

“Bitcoin miners are considered smart money and speculators in BTC markets,” wrote fellow CryptoQuant contributor and analyst Venturefounder in a newsletter of the day.

“As the price of BTC recovers, Bitcoin miners have shown no net distribution trend, in fact, the net accumulation trend that began in July 2021 continues.”

Bitcoin miner BTC reserves an annotated chart. Source: CryptoQuant

An attached chart showed that miners increased their BTC reserves in the second half of May, in particular.

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The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of TNZT.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.