Bitcoin plunges back to $20,000 as miners dump BTC en masse

Bitcoin (BTC) was able to recover slightly in recent days after the major crash of last week. This made the price slightly more stable, but it was still much too early to speak of a trend reversal. It now seems that this relief rally has already come to an end, but can bitcoin hold out above $20,000?

Bitcoin price drops 5% again

The bitcoin price dropped to a low of $17,760 last weekend and then started to recover cautiously. Bitcoin broke through $20,000 on Sunday and the price also briefly recaptured $21,000 yesterday morning.

Towards last night, bitcoin made another jump to $21,500, but the price then encountered too much resistance and then started to fall sharply again. This morning, bitcoin briefly found support around USD 20,500, but it also quickly broke down.

At the time of writing, the BTC price is $20,150 on KuCoin and $19,200 on Bitvavo. That’s a 6.5% drop from yesterday afternoon’s high and a 5% drop in the past 24 hours.

Can bitcoin form a double bottom?

This means that bitcoin is already out of a so-called rising wedge pattern that has formed over the past few days, as can be seen in the chart above. Bitcoin is now arriving at a key support level around USD 20,130, but momentum is pointing further down.

That could mean that bitcoin will soon regain the recent low going to look up around $17,760. That could lead to a double bottom pattern, which usually bullish is.

However, it remains possible for bitcoin to fall even deeper in the near future, as the macro still looks unhealthy. Despite some accumulation taking place, there is still a lot of fear and uncertainty among investors.

On the upside, it is important that bitcoin recaptures the 200-week moving average, which is now at USD 22,400.

Bearish on-chain data for bitcoin

It looks like the huge outflow from Canadian bitcoin exchange traded fund (ETF) is correct. The amount of assets under management fell more than 50% on Friday. It was initially thought to be an error, but apparently it is a sign of the enormous uncertainty in the market, including among institutional investors.

We have been writing for a while that bitcoin miners are under considerable pressure. It now appears that these miners have massively dumped their BTC in May, even more than 100% of their production.

Last week, miners even sent 4,700 BTC to exhanges in a single day. That’s the fourth-highest number since 2018 and just happens to be the exact same number sent out during the bottom end of 2019.

BItcoin sold or HODL? Our members voted

Many investors are of course having a hard time with the recent price drops. How do our members get out of the Discord group deal with this? Have they sold their BTC or are they holding it tight? We recently conducted a poll with this question and below are the results. It seems that the largest group is waiting for the right moment to get back in and/or buy more. Keep in mind that it is usually very difficult to aim precisely at the very deepest point.

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