Bitcoin (BTC) continues to stall after CoinDesk’s Bitcoin Trend Indicator (BTI) released its bullish bias for the first time in three weeks.
According to CoinDesk data, the market cap cryptocurrency has fallen to $26,160 at the time of writing, its lowest since March 17. Prices have fallen more than 12% since May 6, a departure from the rally of traditional risk assets such as the Nasdaq.
The BTI indicator, which measures Bitcoin price direction and strength, turned from bullish to neutral on May 11. The indicator has consistently signaled an uptrend since January 13, with the exception of a brief red flash in mid-March (a downtrend signal) and a neutral value on April 24.
A small number of sellers are lowering prices due to low liquidity, said Matthew Dibb, chief investment officer at Astronaut Capital.
“Even major ones like BTC seem to have a thin liquidity that can be said to be a ‘paper’ right now. I can’t point out the direct reason for the weakness, but medium to large If you have a big offer, the market is going down,” Dibb said.
Major cryptocurrency exchanges, including Binance, have seen recent deterioration in liquidity and market depth, making it difficult for traders to execute large orders without affecting prices.
Dick Lo, founder and CEO of quant-driven trading firm TDX Strategies, said the downward movement could accelerate if traditional risk assets turned downward.
“If U.S. stocks also start to reverse, the decline could accelerate,” Low told CoinDesk. “$25,200 is critical support for BTC followed by $23,100 if further downside is possible.”
Low added that the bearish bias will be invalidated if the price rises above $28,500.
As analysts warned last week, Bitcoin has fallen to two-month lows and technical charts have confirmed a head-and-shoulders bearish reversal pattern. This drop could open the door for a deeper drop towards support near $25,000.
｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
| Image: CoinDesk
｜Original: Bitcoin Prices Slip to 2-Month Lows As CoinDesk’s Bitcoin Trend Indicator Turns Neutral From Bullish