- Bitcoin’s 24-hour trading volume declined by more than 20% while its price moved marginally.
- BTC’s open interest increased, suggesting the current price trend might continue for longer.
Bitcoin’s [BTC] price has remained under the $28,000 mark for quite some time now. The slow price action has disappointed many investors.
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Additionally, the latest reports suggest that the scenario can turn worse. A CryptoQuant analysis pointed out an interesting development regarding BTC’s exchange deposits.
Bitcoin is becoming comfortable under $28,000
As mentioned earlier, BTC’s price has been declining for multiple weeks now. According to CoinMarketCap, BTC’s price went down by more than 1.5% in the last seven days.
Additionally, its 24-hour trading volume also plummeted by 22%. At the time of writing, the king coin was trading at $26,383.26 with a market capitalization of over $511 billion.
Investor confidence in BTC is low
Tomáš Hančar, an author and analyst at CryptoQuant, published an analysis on 25 May that revealed that exchange depositing transaction counts have broken a historical 6-year low at the beginning of this month.
According to the analyst, a possible reason behind this could be the aftermath of the FTX collapse.
Bitcoin’s price could go further down
Another CryptoQuant analyst and author, gigisulivan, posted an analysis that suggested that BTC’s price could plummet further.
He used the spent output age bands metric to point out that in recent weeks there has been an increase in activity in the 3 year – 5 year group. The metric was at its highest since early January, when it preceded a stronger move in the following weeks.
This, according to gigisulivan, could be an early warning signal for a further downtrend as BTC’s price gets comfortable under the $27,000 mark.
Is the decline inevitable?
A look at BTC’s metrics provided by CryptoQuant also supported the possibility of a downtrend. For instance, BTC’s net deposits on exchanges were high compared to the last seven days, suggesting that BTC was under selling pressure.
Bitcoin’s aSORP was also red. This metric revealed that more investors were selling at a profit. Additionally, the number of active wallets used to send and receive coins decreased by -45.66% compared to a day ago, which in general is negative.
Coinglass’ data gave more reasons to worry, as its findings were also bearish.
BTC’s open interest registered an uptick on 24 May. Increasing open interest tends to favor a continuation of that trend.
Therefore, considering BTC’s current negative price movement, a further decline seemed much more likely.
Read Bitcoin’s [BTC] Price Prediction 2023-24
Market sentiment remains bearish
Not only the metrics, but also the market sentiment around BTC was concerning. After a spike, Bitcoin’s weighted sentiment drifted to the negative side.
Though the coin’s social dominance was high, most of the engagements were possibly negative. As per LunarCrush, BTC’s bullish sentiments declined by over 44% in the last 24 hours.