Bitcoin Market Faces Growing Selling Pressure. Are Bears Dominating?
Date: 2023-12-17 Author: Dima Zakharov Categories: BLOCKCHAIN
The volume of Bitcoin (BTC) sales by takers has surpassed the volume of purchases by takers for the first time in 2023, as reported by CryptoQuant analyst Vu Min Kyu.
Growing Selling Pressure:
The volume of BTC sales by takers tracks the total amount of coins sold on exchanges by traders who immediately execute their orders at the current market price. Whenever this metric increases, it indicates a strengthening selling pressure on the asset market.
The fact that takers' sales volume exceeds the buying volume suggests that selling pressure on the market outweighs buying pressure. This could lead to a short-term price decline, as investors may seek to avoid risk or liquidate their assets in a market characterized by high uncertainty, noted Min Kyu.
Bearish Sentiment on the Rise:
The assessment of exchange activity with BTC confirmed that bearish sentiments are gradually taking over the market. Since December 10th, the supply of the leading cryptocurrency on exchanges has increased by 2%.
Currently, there are 1.09 million BTC stored on cryptocurrency exchanges.
Sustained growth in the supply of Bitcoins on exchanges could lead to further price declines as supply begins to outpace demand.
Day Traders Cautious:
On the spot market, daily traders are increasingly refraining from accumulating more BTC. At the time of publication, the Relative Strength Index (RSI) and the Money Flow Index (MFI) had trended downward to 58.77 and 56.17, respectively.
Despite values above the central lines, the downward movement of these indicators signaled a sustained decrease in demand for BTC. Investors' decision to observe the market from the sidelines may be related to the recent price volatility.
Increasing Market Volatility:
The Bollinger Bands for the coin indicated that the gap between the upper and lower bands of the indicator had gradually increased over the past few days. The gradual expansion of these ranges typically indicates an increase in market volatility.
Furthermore, over the past few days, open interest in the coin's futures market has decreased. According to Coinglass data, this metric has fallen by 10% since December 11th.
A decrease in open interest coupled with a corresponding price decline suggests that traders are closing their positions without opening new ones, exerting downward pressure on the asset's price.
