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Key Takeaways
Bitcoin dropped below $28,000 over the past 12 hours.
Meanwhile, Ethereum lost the $1,800 level as support.
Further losses can be expected as selling pressure mounts.
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The crypto market sentiment went into “extreme fear” again after Bitcoin and Ethereum lost price support over the past 24 hours. On-chain data shows increasing selling pressure, which could lead to more significant losses.
Bitcoin and Ethereum Spell Trouble
Bitcoin and Ethereum look bound for significant losses after losing vital support areas.
Nearly $300 million worth of long and short positions have been liquidated across the cryptocurrency market over the past 24 hours. Data from analytics platform Coinglass shows that the losses accelerated shortly after Bitcoin dipped below $28,000 and Ethereum lost $1,800 as support.
Now, it appears that market participants are rushing to exchanges to sell some of their tokens.
On-chain data reveals that whales holding 1,000 to 10,000 BTC have offloaded or redistributed more than 30,000 BTC, worth roughly $870 million, over the past 24 hours. The spike in network activity coincides with a significant increase in the number of tokens flowing into known cryptocurrency exchange wallets. More than 10,000 BTC have been sent to trading platforms within the same period, adding pressure to the flagship cryptocurrency.
Source: Santiment
While sell orders pile up across cryptocurrency exchanges, Bitcoin’s support appears weak.
IntoTheBlock’s In/Out of the Money Around Price model shows no important demand wall underneath Bitcoin that could prevent it from incurring further losses. What can be seen is a massive supply barrier between $29,190 and $30,070, where 1.46 million addresses purchased over 900,000 BTC.
Bitcoin would have to reclaim this critical area as support very quickly in order to have a good chance of rebounding. Failing to do so could generate panic among these addresses that are underwater, which could trigger a sell-off that sends BTC toward May 12’s low at $25,370 or even $21,000.
Source: IntoTheBlock
Although on-chain metrics do not show a similar increase in the number of ETH flowing into known cryptocurrency exchange wallets, the Global In/Out of the Money model does reveal a lack of demand walls. The most significant support level for Ethereum sits around $730, where more than 13.31 million addresses bought over 13.25 million ETH.
Based on transaction history, Ethereum would be unlikely to recover and enter a new uptrend until it forms a market bottom around $730 or climbs above $2,550.
Source: IntoTheBlock
The current conditions suggest that there is more room to go down before the end of the crypto winter. Fortunately, there are a few on-chain metrics that have accurately anticipated previous market bottoms and can provide guidance about a potential trend reversal in the future.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
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