Bitcoin (BTC) plummeted again this week and last night the price fell even deeper. That means that fears are currently at their highest since the end of January this year and the corona pandemic in 2020. Still, some analysts are hopeful that the price may be close to a bottom.
#Bitcoin GM Bears. 🐻😱
Fear & Greed index is on lowest level since 25 Jan 22. pic.twitter.com/ilfoGyrYRS— IT Tech (@IT_Tech_PL) May 8, 2022
Bitcoin price fell 8.5% this week
From bitcoin price held above USD 38,000 early this week and started rising ahead of the Federal Open Market Committee (FOMC). Shortly after the meeting, the rally accelerated, but the price just narrowly missed $40,000.
Then bitcoin slowly started to fall and half a day later it plummeted. Bitcoin lost traction at USD 39,500 and plunges to USD 37,000 in an instant. Half a day later, bitcoin reached $36,000 and dipped to $35,500.
Bitcoin still held on to that $36,000 on Saturday, but by midnight the price lost its grip on this too. Bitcoin plummeted to $35,000, made another one bounce to $35,750 and then fell further.
Early this morning, bitcoin touched a low of $34,400, the lowest price since January 23, when bitcoin dipped to $33,000. Bitcoin recovered slightly this morning, but has not yet moved beyond $34,900 and currently stands at $34,600 on KuCoin and €32,800 on Battle† Bitcoin is currently down 3.9% and this week it is even 8.5%.
41% of BTC supply is in loss
According to analyst On-Chain College, this means that 41% of the circulating supply, or about 7.7 million BTC, is currently in loss. That is also the highest since April 2020, shortly after the Covid outbreak.
7.7 million #Bitcoin are currently sitting in loss. This is the highest amount since April 15th, 2020.
That’s almost 41% of the total circulating supply. pic.twitter.com/uXPR9PiJHT
— On-Chain College (@OnChainCollege) May 7, 2022
How deep can BTC price fall?
We’ve been warning in these market updates for a while that the price could fall even deeper, especially if the range between $37,000 and $39,000 doesn’t hold. The big question is how deep bitcoin can fall further. If bitcoin doesn’t find traction quickly and reverse trend, we should expect to see a drop to $30,000 and possibly all the way to $27,000-$28,000.
Still, several analysts are speculating that bitcoin may be near a bottom now. Which direction the price goes first will probably depend on macroeconomic developments for the time being. Equity markets like Nasdaq and S&P 500 may also be bottoming after months of declines. If these can recover, then bitcoin is likely to follow.
NASDAQ Monthly RSI is currently at levels only seen in the 2001 & 2008 Bear Markets: pic.twitter.com/nsJRvHhl0k
— Matthew Hyland (@MatthewHyland_) May 8, 2022
Bitcoin Accumulation Continues
On-chain data shows investors are accumulating BTC again, a bullish sign. For example, analyst Shayan reports that the number of Bitfinex long positions is increasing, just like the last time BTC fell so low.
They started to realize their profits step by step and closed their positions. The exact behavior is happening right now. During the recent consolidation phase, Bitfinex longs have been increasing significantly. Especially during the recent shakeout from $49K to $35K.👇🏿 pic.twitter.com/P7Q2fYL245
— Shayan.₿TC ⚖️📈📉 (@greatest_trader) May 7, 2022
Jaan Wüstenfeld reports that the Canadian bitcoin spot exchange-traded fund (ETF), or publicly traded fund, of Purpose also saw significant inflows this week:
That was a week of significant flows for the Canadian #Bitcoin Purpose spot ETF.
First, the biggest inflow of 2.9k $BTC on Wednesday, followed by the third biggest outflow of 1.4k BTC on Thursday, and yesterday the third largest inflow of 1.6k BTC.
AUM is now at 34.5k BTC. pic.twitter.com/2umwbKx6SN
— Jan Wüstenfeld 🇺🇦 (@JanWues) May 7, 2022
Analyst Root also reports that the lack of hype along with the high fear is driving the falling BTC price. He is convinced that this will turn around at some point and then possibly into a so-called supply shock leads:
While price is down because hype is gone and fear is ruling the market — a supply shock is brewing.
Remember, fear will fade and hype will pick up again. #Bitcoin pic.twitter.com/56LOqMJu49— Root 🥕 (@therationalroot) May 7, 2022
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