Bitcoin (BTC) experienced downward price pressure in May, with the token failing to cross the $30,000 resistance mark. This development can be linked to on-chain activity indicating an increase in the number of Bitcoins sold on exchanges during this period.
300,000 Bitcoin sold on exchanges in May
According to CryptoQuant, a data explorer, sold more than 300,000 bitcoins this month that were purchased between one and six months ago. It is worth noting that the majority of these sales were made by individuals who acquired the cryptocurrency between November last year and January this year.
According to the data explorer, 266,000 bitcoins were purchased between November and January, while 78,000 bitcoins purchased between January and March were sold in May. The motivation behind these sales could be to take profits because of the significant price increase that Bitcoin has experienced since the investors bought it.
From November to April, the price of Bitcoin rose from $16,000 to $31,000. However, the cryptocurrency has been making lower highs since April, possibly due to the selling activity of these investors in May.
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Bitcoin shows strength around $27,000
Bitcoin’s price action over the past few days has been significant as it demonstrated the cryptocurrency’s resilience in the face of market volatility. As mentioned earlier, Bitcoin had fallen as low as USD 26,800 before quickly recovering and testing support at the USD 27,000 low. This successful retest of support reaffirmed Bitcoin’s strength in this price zone.
The high volatility of the market yesterday can be attributed to the United States inflation report, which revealed higher-than-expected price gains. In addition, false rumors that the US government was selling Bitcoin caused bearish pressure on the market. Despite these events, Bitcoin held its own and was able to retest support.
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Bitcoin has tested support around $27,000 several times over the past two months and has formed a solid bottom. In addition, the Fear & Greed Index has fallen, bringing the market back to neutral. While this level isn’t necessarily bad at face value, the fact that the index has slipped from greed to neutral is concerning.
Nevertheless, despite some analysts are predicting that the cryptocurrency could fall to lower levels, but has not fallen below this price zone. This is a positive sign for investors as it shows strong demand for Bitcoin at this level. Bitcoin price has consolidated as the market seeks a new equilibrium following the recent price correction.
Bitcoin price
At the time of writing, Bitcoin is trading at USD 26,804 with a 24-hour price increase of 2%. It remains to be seen if the token will provide a renewed push towards the USD 30,000 resistance line in the coming days.
-Featured image from iStock, charts from TradingView.