With one week left in May, Bitcoin (BTC) could end May with its first drop of 2023, down 6.8% at the time of writing. Ethereum (ETH) has also shown similar price movements, but the decline since the beginning of the month was smaller at 0.78%.
On the other hand, according to CoinDesk Indices trend indicators, both Bitcoin and Ethereum are currently showing signs of trouble for bulls.
The trend indicator is developed by CoinDesk Indices, a subsidiary of CoinDesk. It provides daily signals that indicate the direction and strength of price trends. There are five signals ranging from “strong downtrend” to “strong uptrend”.
Shift from uptrend since the beginning of the year to downtrend
Both the Bitcoin Trend Indicator (BTI) and the Ethereum Trend Indicator (ETI) had many periods of “upward trend” or “strong upward trend” since the beginning of 2023, but now they are “downtrend”. trend”.
Applying BTI and ETI historically, signals of a “downtrend” appeared prior to a bear market that saw Bitcoin drop 47% and Ethereum 60% from April to June 2022.
The downtrend reflects events that have spooked investors, such as regulatory issues and macroeconomic uncertainties such as the US debt ceiling. Bitcoin and Ethereum have risen four months in a row since the beginning of the year.
The reversal to the downtrend shows that Bitcoin and Ethereum’s 5-day moving averages are below and holding on to their long-term moving averages.
Trading volume is also sluggish
Trading volumes are still sluggish. Bitcoin and Ethereum trading volumes on cryptocurrency exchange Binance have fallen below the 20-day moving average for the 11th and 17th straight days.
The Average True Range (ATR), a measure of Bitcoin and Ethereum volatility, is also down 19.4% and 28% respectively. Some investors are hoping that May will end on a high after January-April, but with the trading range flattening, there is not much reason for optimism.
Bitcoin price needs to rise about 7.5% to end the month above the $29,300 level that started the month. On the other hand, Ethereum, which has suffered a small drop, can only rise about 1%.
Historically, Bitcoin and Ethereum have been relatively solid in May, averaging 0.195% daily gains and around 1.4% weekly gains. However, considering the number of days left in May, we think Bitcoin has little room for a positive close.
｜Translation: coindesk JAPAN
｜Editing: Rinan Hayashi
| Image: CoinDesk
｜Original: CoinDesk Indices Trend Indicator Hints at Continued Downturn for Bitcoin, Ether