Bitcoin’s $27,000 stalemate: Traders ponder next moves
- Long-held BTCs remained inactive for a prolonged period of time.
- Selling pressure outweighed accumulation on a daily chart.
Despite notable increases in price action, the current level of Binary Bitcoin Coin Day Destruction in 2023 remains subdued compared to the elevated destruction seen during the 2021 primary bull market, on-chain data provider Glassnode found.
The current level of Binary #Bitcoin Coin Day Destruction remains heavily muted when compared to the sustained elevation in destruction witnessed across the 2021 primary Bull Market.
This suggests mature coins are remaining largely dormant relative to their long standing… pic.twitter.com/h1uevHNvn7
— glassnode (@glassnode) May 17, 2023
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According to the data provider, this indicated that long-held Bitcoins remained inactive in relation to their long-standing baseline and are yet to change hands.
An on-chain assessment of BTC’s Mean Dollar Invested Age metric (MDIA) lent credence to this position. This metric measures the average age of the dollars invested in a given asset.
According to Santiment, when an asset’s MDIA increases (as is typically the case for most coins), the investments associated with that asset progressively become less active over time.
However, it becomes worrisome when this metric rise over an extended period, spanning months, as it generally suggests stagnation within the network of the asset concerned. Such stagnation makes it hard for an asset’s price to increase.
Data from Santiment showed a consistent uptrend in Bitcoin’s MDIA since February, suggesting that long-held tokens refused to change hands. Interestingly, this happened despite the significant price growth that marked the year’s first quarter.
BTC traders largely unsure of what comes next
As BTC’s price hovers around the $27,000 range, uncertainty lingers among many traders regarding the future trajectory of the coin’s price, leading them to refrain from trading.
An assessment of the leading coin’s price movements on a daily chart revealed that selling pressure outweighed accumulation.
At press time, momentum indicators remained in a downtrend. For example, suggesting that BTC might be oversold, its Money Flow Index (MFI) was 30.10. Also, below its neutral-50 line at press time, the coin’s Relative Strength Index rested at 42.71.
Indicating liquidity exit from the BTC market, its Chaikin Money Flow fell back into the negative range on 16 May and has since remained there. At -0.03 at press time, BTC distribution exceeded accumulation.
In addition, BTC’s On-balance volume at a negative -98.238k and northbound at press time indicated a persistent increase in selling pressure.
On the chain, since BTC began to trade sideways at the beginning of Q2, its weighted sentiment fell below the center line and has since remained in the negative territory.
This indicated that the coin has since been trailed by poor investors’ sentiment, making it hard for its price to climb above $27,000.
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However, despite the sideways movement of BTC’s price, key whale addresses holding between 1000 to 10,000 BTCs continued to accumulate. In a new report, Santiment found:
“About 84,897 BTC has been collectively added to the largest group of addresses that typically still has non-exchange, semi-active traders.”
This, according to the data provider, “is generally a nice sign.”