After closing weekly at lower levels for nine consecutive weeks, Bitcoin finally managed to break this downside trend. The largest cryptocurrency by market cap marked its first green weekly candle since the end of March and managed to record the first weekly green candle in about three months. So, what levels are next?
Bitcoin has closed the week positive for the first time since March
As we have also reported as Kriptokoin.com, Bitcoin has started to experience gradual retreats since March. Weeks later, it broke records with weekly candles closing in red in a row. As of writing, BTC is changing hands at $31,273, an increase of 4.9%. On a weekly basis, it increased by 6%. Although this means a sigh of relief for BTC investors in the short term, it makes one wonder whether the downtrend has completely reversed. Some analysts suggest that this may just be a bear market rally, with some more corrections ahead.
BTC is trading above the 200-day moving average (DMA). Looking at historically seen levels, BTC has bottomed out below the 200 DMA, which is about 25 percent below current levels. Rekt Capital, a famous cryptocurrency analyst, explains this situation with the following statements:
Historically, BTC tends to bottom around, below the 200-week moving average. BTC will need to drop another 25 percent from current prices to bottom by 200 MA.
Miners sell
Meanwhile, data from the ten chain data source Glassnode shows that BTC miners made a heavy sell transaction during the recent market correction. Glassnode says Bitcoin miners have clearly become “distributors” since their last sale. The amount of BTC held by miners has dropped drastically, with between 5-8k BTC on a monthly basis.
Bloomberg data, citing data from CoinMetrics, shows that Bitcoin miners transferred approximately 200,000 BTC to exchanges in the last month of May. Some of the vendors include top publicly traded mining firms like Riot Blockchain. Will Foxley, content director at mining hardware market and hosting services provider Compass Mining, states that miners only consider the macro environment and prudently sell BTC at these levels to keep their operations safe.
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