As a result of the fall, the price of Bitcoin dropped to the level of July 2021. In July last year, the BTC price also struggled to stay above $30,000. Before that, a fall to $30,000 was recorded in January last year. Along with the fall in the price of Bitcoin, the market fixes a decrease in capitalization. Cryptocurrency market capitalization dropped to $1.4 trillion. Despite pressure from the bears, the BTC price manages to hold above $30,000. At the time of publication, Bitcoin is trading above 31,000.
Source: Santiment
To minimize risks and losses, investors begin to diversify their portfolios. They are selling Bitcoin and cinsidering altcoins.
The above graph shows that 40,600 BTC coins were added to investors’ exchange wallets. Thus, investors are trying to reduce the risk of their portfolio or to protect margin positions with more collateral.
Cryptoquant says coin inflows to spot exchanges hit a new two-year high as BTC whales deposited their assets on exchange wallets.
Source: Cryptoquant
Such data allow us to conclude that investors are in a panic, and the market is 100% owned by the bears. The fear and greed index, which fell from 11 to 10, confirms this.
Source: alternative.me
It is worth noting that there was an increase in transaction fees last week. It rose to 2.72, that is, by 15% of the usual figure. This increase in commissions can be explained by the fact that investors paid inflated fees to increase the priority of their orders for quickly replenishing exchange wallets. It suggests that investors are still in a hurry to add collateral to the margin in response to market volatility.
Source: BitInfoCharts
It is also worth noting that not only small investors but also whales suffered from such a sharp fall in the price of Bitcoin. Bitcoin whales have also started selling their coins. Glassnode has seen weak buying activity since mid-April.
What does the chart show?
The chart shows continuing downtrend that has been forming since the beginning of April as part of a long-term downtrend. The trendline is capping BTC/USD at around 38,500 while providing support near 30,000. The pair also dropped well below the 100 DMA which provides additional resistance around 40,000.
The main question is whether the BTC/USD pair will hold above 30,000. If the pair drops below this level, we will see decline toward 29,500. A break of this level will send the BTC/USD pair to the 28,800 area.
If the pair manages to hold above 30,000, it will increase the chances of a return above 31,500. Trading above this level will send the BTC/USD pair towards the 32,650 resistance zone.
