Dip Buying Sentiment Slides as Bitcoin Drops to Long-Term Support
On May 26, on-chain analytics provider Santiment observed that Bitcoin traders often buy short-term, small crypto price dips but have been scared to buy the longer-term bigger ones.
It added that mentions of buying the dip are dormant at the moment, suggesting very weak market sentiment.
“Historically, this kind of #FUD has been good to capitalize on,” it said.
Furthermore, Bitcoin prices have retreated almost 15% since its rally to just under $31,000 in mid-April. The lack of volume at the moment also suggests that this dip isn’t low enough yet to entice more buying pressure.
Bitcoin Drops to Support
Santiment also reported that there has been an increase in selling at a loss among crypto holders. It used the MVRV (market-value-to-realized-value) metric, which indicates the vast majority of crypto assets are flashing under-bought signals across the sector.
“With markets seeming dull to traders, we’re continuing to see restless addresses emptying their wallets and selling at a loss.”
Glassnode noted that using the previous bull market peak as an anchor, Bitcoin price has fallen to the golden Fibonacci ratio of -61.8%. This is at $26,200, where prices had fallen to a few hours ago.
Since then, BTC has nudged up slightly to just below $26,500 at the time of writing but remains bearish in the short term.
Following weeks of consolidation and slow depreciation, the Bitcoin Fear and Greed Index has remained at neutral status. It is currently showing a value of 49 where it has been for the past fortnight.
Crypto Market Outlook
Crypto markets fell to a ten-week low in late trading on May 25, with total capitalization falling to $1.14 trillion. They have only recovered marginally during the Friday morning Asian trading session suggesting more consolidation could be ahead over the weekend.
Following a dip to $26,000, BTC prices have added half a percent on the day but remain sideways, hovering just above long-term support levels. A breakdown from here would find further support at around $25,000.
Ethereum prices fell to $1,770 yesterday but have since recovered to trade at $1,807 at the time of writing.
The only altcoins posting a measurable gain at the moment are XRP, MATIC, and LTC, each having gained 3% on the day.
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