Bitcoin enthusiasts have been left to ponder what the near future holds as the cryptocurrency entered a new week of bearish sentiment, so far, however, the week has been largely positive and we have seen good movement within the market. Bitcoin has remained lower than the $40,000 level ever since the great sell off and it is becoming increasingly difficult to speculate which way the price will go next.
According to sources from Cointelegraph Market, there are five key factors worth considering which show which direction Bitcoin may lean next. While the traditional market may be rattled by inflation, Bitcoin on the other hand has seen positivity since the cryptocurrency had a fixed supply and diminishing curve, thus it cannot be manipulated. Therefore, institutions with large exposure to cash are continuing to expand in line with the inflation rate.
According to data by Glassnode, new investors are selling their holdings at a rapid pace, while old investors are keeping and adding to their holdings. At the same time, miners have bought the dip, and are accumulating their holdings alongside long-term holders.
Bitcoin’s 200 DMA and 20-WMA show the cryptocurrency is likely to fall below $20,000, reported by DecenTrader. Contrary to the report, PlanB the creator of S2F price models disagrees stating the probability of Bitcoin falling lower than its realized price, currently at $23,000, is unlikely. PlanB stated the current year is likely to repeat the 2017 bull runs again.
According to DecenTrader, many entrants have been wiped out during the sell-off, and are not re-entering. Funding has also remained significantly low. This implies the growth in price will be fuelled by long-term holders adding to their stacks rather than speculative bets in the short term.
May 2021 has been the worst may for Bitcoin, with many holders losing 40% of returns on a monthly basis. Compared to the 50% gain in May of 2017 and 2019, along with the 19% losses in 2018 May, this year has been the worst.