- Bitcoin is currently in a consolidation phase between $25,986 and $32,000.
- The total relative shift in Bitcoin’s number of wallets over a 30-day period has slowed down.
- Bitcoin’s mean transaction size has plummeted.
- The put-to-call ratio on Bitcoin has increased, indicating that traders are now negative on the cryptocurrency.
- Bitcoin’s volatility index has dropped, indicating that the market is not expecting volatility on the cryptocurrency.
On May 17 and May 18, the US stock market had a dramatic recovery after massive optimism that a debt ceiling agreement may be on he way.
However, on May 19, the market lost some of its gains due to rumors that the negotiations had temporarily ceased.
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Bitcoin and crypto on the other hand, continue to teeter on the edge of bearishness.
Amid the impressive long-term prospects of Bitcoin, analysts aren’t too sure of the flagship cryptocurrency’s short-term behaviour, and there might even be a possibility of a drop to $22,000.
Bitcoin So Far
After steering off its lane around $32 in July, Bitcoin appeared to have found rest at $29.
It even consolidated between $30,983 and $28,659 for as long as mid July until mid-August.
However, the bears soon caught up to Bitcoin and drove its price further down to below $26,000.
This means that Bitcoin is now officially in a consolidation phase between $25,986 and $32,000.
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Ranges and consolidations are neutral formations, aren’t they?
Well, not quite. There may be reason to believe that Bitcoin is in danger of a drop to $22,000, as you will soon see.
Consolidation Or Preparation For A Drop? Bitcoin’s Address + Exchange Activity
According to an interesting tweet from NeuroInvest Research, the total relative shift in Bitcoin’s number of wallets over a 30-day period has slowed down.
This doesn’t mean that the number of Bitcoin wallets aren’t growing. It just means that the rate of growth rate is now going at a slower rate, especially for those holding 10 to 10,000 bitcoins.
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This cohort, as you might have guessed, are the whales.
But wait, that’s not all.
Bitcoin Mean Transaction Size Plummets
It gets worse for Bitcoin’s on-chain metrics.
According to another tweet from Glassnode Alerts, Bitcoin’s mean transaction sizes are in trouble as well.
Glassnode says that the mean transaction size (7d MA) for bitcoin has now fallen to 518.646, over a 7-day average.
This level is even lower than last month’s, which averaged at about 518.770 on 21 August 2023.
This shows that people are sending and receiving less and less Bitcoin, and traders are buying and selling smaller orders.
Traders Are Indeed Getting Tired: Bitcoin’s Put-To-Call Ratio
The growing put-to-call ratio on Bitcoin shows that traders are now negative on Bitcoin.
According to the chart below, we can see that in recent weeks, Bitcoin (and ethereum’s) put-to-call ratio increased from 0.42 to 0.47.
This indicates a shift in market sentiment toward caution on Bitcoin, and that traders are now taking profits and are betting on a decrease in the price of Bitcoin rather than a rise.
Bitcoin’s volatility index’s drop is also disturbing, because it indicates that the market is not expecting volatility on the cryptocurrency, and that more traders are betting on further price sluggishness.
All of this data from bitcoin’s futures and derivatives suggests that the bearish momentum is intensifying, particularly given that the SEC could potentially delay the approval of a Bitcoin spot ETF until 2024.
Can Bitcoin Really Crash To $22,000?
From what we can see on Bitcoin, a price drop to $22,000 would not be farfetched by any means.
Bitcoin continues to test the $25,000 resistance as the bearish outlooks mount.
However, what remains clear is that the struggle between the bulls and bears around $25,000 will continue until a breakdown or bounce occurs.
Another disturbing factor to be aware of is the impending death-cross between Bitcoin’s 200 and 50-day averages.
If this death-cross happens, it would serve as the final confirmation of Bitcoin’s bearishness, and would lead to a break below $25,000 as Bitcoin plummets to $22,000 or lower.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.