Bitcoin (BTC) made a significant dip yesterday, but it still wasn’t a breakout. Bitcoin immediately recovered to the same range that the price has been in for two weeks now. However, Bitcoin is starting to look less and less stable while fear and uncertainty are still high.
Bitcoin Fear and Greed Index is 12 ~ Extreme Fear
Current price: $29,509 pic.twitter.com/uRG6qa7Ked— Bitcoin Fear and Greed Index (@BitcoinFear) May 26, 2022
Bitcoin price drops by 2%
The bitcoin price consolidated around $29,600 yesterday morning, but then began to decline. Bitcoin found support around $29,000 yesterday afternoon, but then plunged and touched $28,000 on some exchanges.
It turned out to be a so-called fake out to go and bitcoin immediately made a rebound back. Bitcoin broke through at $29,000 and then recaptured around $29,600. The price initially held there, but shortly after midnight, bitcoin lost its grip again.
For now, support is holding around USD 29,000. Bitcoin briefly dipped to $28,750 this morning, but recovered right away. At the time of writing, the BTC price is $29,000 on KuCoin and $27,000 on Bitvavo. This means that the BTC price is currently 2% in the minus.
Correlation between BTC and stocks is declining
It is striking that the altcoins look increasingly weak compared to bitcoin. It may be a sign of the high uncertainty in the market. Investors take less risk and exchange their alts for BTC. The BTC dominance continues to increase.
In addition, the US dollar index (DXY) continues its downward trend that started two weeks ago. The expectation was that this would work out well for BTC, but we don’t see much of that yet.
By contrast, stock markets such as the S&P 500 and Nasdaq turned green again yesterday. The correlation between bitcoin and these markets continues to decline, albeit in the opposite direction than expected. Nevertheless, it is still much too early to talk about a real decoupling.
#Bitcoin Correlation between BTC and SPX is inverted now.
fun fact that $BTC and SPX are going in opposite direction but unfortunately BTC ⬇️ https://t.co/DchZU6q6ON pic.twitter.com/it5wzpX2sp— IT Tech (@IT_Tech_PL) May 26, 2022
Even long-term BTC holders are now in a loss
The downward trend, meanwhile, has lasted so long that even many long-term holders (LTH) are in a loss. Analyst Lex Moskovski reports that things haven’t looked this bad since March 2020, when prices crashed due to the coronavirus outbreak. Bitcoin then recovered faster than other markets.
Now it’s Bitcoin long holders who are taking loss.
LTH SOPR is as bad as it was back in March 2020. pic.twitter.com/nyqTlFfnSL
— Lex Moskovsky 🐙 (@mskvsk) May 27, 2022
How deep can bitcoin fall?
Analyst Rekt Capital explained earlier this week that bitcoin is historically still all the way to the 200-week mark simple moving average (SMA) may fall, which is now around USD 22,000. The analyst went deeper into this yesterday and came to the same conclusion, this time using the death cross†
The analyst explains that BTC has historically fallen by 43% after the price makes this death cross. Bitcoin would indeed end up at about the 200w SMA. The analyst concludes that bitcoin may still fall to a range between $19,700 and $23,500, but the price could even go short. wick all the way to $15,500.
this may, #BTC lost a key Monthly support (green)
In fact, this area has flipped into new resistance (red)$BTC has since reached this current 1M support (orange)
Outlined are all major Monthly supports down to $10K
What do they have in common with Death Crosses?
a thread… pic.twitter.com/h4FndoNdcV
— Rekt Capital (@rektcapital) May 26, 2022
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A reminder of where we are right now for #Bitcoin †
Live chart: https://t.co/x4l1J1nizc pic.twitter.com/XgNoNieqht
— Philip Swift (@PositiveCrypto) May 27, 2022