Dip Buying Sentiment Slides as Bitcoin Drops to Long-Term Support

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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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