Bitcoin (BTC) is trading below $57,000, increasing the risk of further decline for altcoins. BTC has failed to surpass the $61.66 SMA50 resistance for about 7 days and has retreated to its base level. Potential volatility increase in the coming hours may prompt cautious investors to sell as Asian markets open.
Why Isn’t Bitcoin Rising?
The primary reason for the weakness is a lack of demand. Glassnode data clearly shows this through the CVD data. The cumulative volume balance (CVD), which tracks the balance between buying and selling, indicates net selling pressure. As seen in the chart, the negative adjusted spot CVD (30d SMA) confirms the consistency of selling pressure, and analysts wrote:
“The recent inability to surpass the $70,000 region can be partly explained by the weakness in spot demand (negative adj-CVD). The activity in spot markets shows a clear trend towards selling pressure recently, which has not yet fully subsided.”
Death Cross
The critical support point at the 50-day moving average was lost again amid the decline originating from Japan and global recession concerns. Popular crypto analyst Mags is worried about the death cross formed here.
“The death cross, formed by the 50 MA crossing below the 200 MA, signals short-term weakness in the market.”
FTX collapse has caused the second death cross since September 2023. If the moving averages are reclaimed, it could trigger a reversal similar to the last occurrence. Mags wrote:
“If the formation repeats, we could see a few weeks of volatile PA here. A bullish confirmation would be reclaiming the MAs followed by a nice bullish crossover.”
Experts’ Comments
The chart shared by Material Indicators reflects whale block liquidity demand with the drop below the 50-day SMA. Whale demand is not bad and they are still buying, but liquidity demand reduces upward cash inflows, causing weakness.
“If BTC bulls cannot gain the momentum to surpass $65,000, they will need to stack more bid liquidity above $58,000 to keep the range high.”
Michael Poppe mentions that everything is fine as long as the $56,000 to $57,000 levels are maintained.
