It seems that Bitcoin’s selling pressure is through the roof again as the first cryptocurrency dropped below $65,000, with more than $140 million liquidated. However, the main source of selling pressure might not have been so obvious.
Recent price action indicates that Bitcoin is having difficulty maintaining its hold above important support levels. With a break below the 50 EMA and an approach to the 100 EMA, the daily chart shows an extreme decline. There is also growing bearish momentum indicated by the RSI.
The fact that Coinbase is the source of the selling pressure is crucial. The Coinbase Premium Gap, a measure that contrasts the price of Bitcoin on Coinbase Pro with those on other exchanges, is significantly negative, suggesting that Coinbase is currently executing orders of institutional investors who are willing to sell their holdings.
The lengthy period of miner capitulation is also clarified by Willy Woo’s analysis. As indicated by the Bitcoin Hash Ribbons, which show periods of stress and recovery for miners, we are currently experiencing a record-breaking amount of miner capitulation. Woo says that when the hash rate starts to rise again and weak miners leave, Bitcoin usually bounces back.
In a similar vein, the volume of big USD transactions has drastically decreased, suggesting that major players are scaling back or selling their holdings. The Bulls and Bears indicator which indicates a preponderance of bearish addresses highlights the bearish sentiment even more. It appears that more investors are selling rather than buying as the gap between bullish and bearish addresses has widened.
The combination of these data suggests that there are multiple sources of selling pressure. With enormous amounts of Bitcoin being sold on the platform, Coinbase seems to be a major driver. Furthermore, as miners sell off their holdings to pay for operating expenses, the extended miner capitulation phase intensifies the selling pressure.
