U.Today – Selling pressure appears to have increased again as the first cryptocurrency fell below $65,000 and over $140 million was liquidated. However, the main source of selling pressure may not have been so obvious.
Recent price action indicates that Bitcoin is struggling to stay above essential support levels. With the break below the 50 EMA and approaching the 100 EMA, the daily chart shows an extreme decline. The RSI indicator also indicates growing bearish dynamics.
The key is that Coinbase (NASDAQ:) is a source of selling pressure. Coinbase Premium Gap, a measure that contrasts the price of Bitcoin on Coinbase Pro with the price on other exchanges, is significantly negative, suggesting that Coinbase is currently fulfilling orders from institutional investors who are willing to sell their shares.
The long period of miners’ surrender is also explained 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 number of miner surrenders. Woo says that when hashrate starts to rise again and faint miners leave, Bitcoin tends to bounce back.
In a similar vein, the volume of vast USD transactions has fallen dramatically, suggesting that major players are reducing their investments or selling their holdings. The Bulls and Bears indicator, which shows the dominance of bearish addresses, further emphasizes the bearish sentiment. It appears that more and more investors are selling rather than buying as the gap between bullish and bearish addresses widens.
The combination of this data suggests that there are multiple sources of selling pressure. Given the massive amounts of Bitcoin being traded on the platform, Coinbase appears to be a major factor driving this trend. Moreover, as miners sell their shares to cover operating costs, the prolonged capitulation phase of miners increases selling pressure.
