On May 26, on-chain analytics provider Santiment observed that Bitcoin traders often buy small crypto price dips in the short term, but were afraid to buy larger ones in the longer term.
He added that buy mentions of the decline are dormant at the moment, suggesting very weak market sentiment.
“Historically, this type of #FUD has been good to capitalize on,” he said.
Additionally, Bitcoin prices are down nearly 15% since rallying to just under $31,000 in mid-April. The lack of volume at the moment also suggests that this decline is not yet small enough to attract further buying pressure.
Bitcoin drops to support
Santiment also reported that there has been an increase in selling at a loss among crypto holders. He used the MVRV (market value to realized value) metric, which indicates that the vast majority of crypto assets are giving out underbought signals in the sector.
“With the markets looking boring to traders, we keep seeing choppy addresses emptying their wallets and selling at a loss.”
Glassnode noted that using the previous bull market peak as an anchor, Bitcoin price fell to the golden Fibonacci ratio of -61.8%. This is at $26,200, where prices had fallen a few hours ago.
Since then, BTC has risen slightly to just under $26,500 at the time of writing, but remains bearish in the near term.
After weeks of consolidation and slow depreciation, the Bitcoin Fear and Greed Index remained at a neutral status. It currently displays a value of 49 where it had been for a 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 only rallied slightly in the Asian trading session on Friday morning, suggesting that more consolidation may be ahead over the weekend.
After falling to $26,000, BTC prices rose 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 showing a measurable gain at the moment are XRP, MATIC and LTC, each of which gained 3% on the day.