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On May 26, the on-chain analytics firm Santiment noted that Bitcoin traders frequently purchase minor short-term price dips but have shown reluctance to invest during more significant long-term declines.
It further indicated that discussions around buying the dip are currently inactive, implying a very weak market sentiment.
“Historically, this kind of #FUD has been good to capitalize on,” it stated.
Additionally, Bitcoin prices have decreased nearly 15% since reaching just under $31,000 in mid-April. The current lack of trading volume also indicates that this dip may not be sufficiently low to attract increased buying activity.
Bitcoin Drops to Support
Santiment also highlighted a rise in selling at a loss among cryptocurrency holders. It referenced the MVRV (market-value-to-realized-value) metric, which shows that a significant number of crypto assets are signaling under-bought conditions across the market.
“With markets appearing lackluster to traders, we’re continuing to see restless addresses liquidating their holdings and selling at a loss.”
Glassnode observed that when using the previous bull market peak as a reference point, Bitcoin’s price has declined to the golden Fibonacci ratio of -61.8%. This level is at $26,200, where prices had dropped to a few hours prior.
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Since then, BTC has slightly increased to just below $26,500 at the time of this report but continues to exhibit a bearish trend in the short term.
After several weeks of consolidation and gradual depreciation, the Bitcoin Fear and Greed Index has maintained a neutral status. It is currently reflecting a value of 49, where it has remained for the last two weeks.
Crypto Market Outlook
Crypto markets reached a ten-week low in late trading on May 25, with total capitalization declining to $1.14 trillion. They have only seen a slight recovery during the Friday morning Asian trading session, suggesting that further consolidation may be on the horizon over the weekend.
After dipping to $26,000, BTC prices have gained half a percent on the day but remain stagnant, hovering just above long-term support levels. A breakdown from this point would find additional support around $25,000.
Ethereum prices fell to $1,770 yesterday but have since bounced back to trade at $1,807 at the time of this report.
The only altcoins showing a notable increase at present are XRP, MATIC, and LTC, each having risen by 3% on the day.
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