- It appears from recent market activity that Bitcoin is struggling to hold above significant support levels. The daily chart exhibits a sharp decrease with a breach below the 50 EMA and an approach to the 100 EMA. The RSI indicates an increasing bearish momentum as well.
- It’s important to note that the selling pressure is coming from Coinbase (NASDAQ: COIN). The Coinbase Premium Gap, which compares the price of Bitcoin on Coinbase Pro to other exchanges, is notably negative, indicating that institutional investors’ orders to sell their holdings are presently being executed by Coinbase.
- Willy Woo also provides clarification on the protracted period of miner capitulation. The Bitcoin Hash Ribbons, which display times of stress and recuperation for miners, demonstrate that we are currently witnessing unprecedented levels of miner capitulation. According to Woo, Bitcoin often recovers when the hash rate starts to increase once more and the ineffective miners depart.
- Similarly, the volume of large USD transactions has declined sharply, indicating a reduction in the holdings of key participants. The bullish sentiment is further highlighted by the Bulls and Bears indicator, which shows a plurality of bearish addresses. The difference between optimistic and bearish addresses appears to be growing, suggesting that more investors are selling rather than buying.
- These data together imply that there are several sources of selling pressure. Coinbase appears to be a key factor, as the platform is selling massive amounts of Bitcoin. Furthermore, the prolonged miner capitulation phase increases the selling pressure as miners sell off their holdings to cover operating expenditures.
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