Bitcoin drops 1.5% on US market open amid warning miners may ‘capitulate’ in months

Bitcoin (BTC), which fell along with US equities on May 31, was a sign that Wall Street’s return began with a whimper.

BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView

Stocks move the BTC price south once again

TradingView and Cointelegraph Markets Pro data showed that BTC/USD returned to close to $31,000 shortly after markets resumed trading following a public holiday.

This move was in line with those of stock indices. The S&P 500 lost 1.1% at the opening, while the Nasdaq Composite Index traded down 1%.

Social media commentators continue to voice their concerns about the stability of Bitcoin’s recent rise, despite its obvious volatility.

The rise in #BTC prices is a hoax. We don’t know what the price will go to. But I have no doubt that it is pumped… We can see a very negative delta on the daily time frame as well as imbalances in favor of sellers in the aggressive seller zone…
— M_Ernest_ BTC (@M_Ernest_) May 31, 2022

Analyst Jan Wuesterfeld stated that it is possible for equities to lose some of the gains they made last week in the latest edition his Bitcoin Market Intelligence newsletter.

“In my opinion, Bitcoin will likely also give away some gains made over the weekend (reconnection) if that happens.”

Others concentrated on the uninspiring long term price signals. Kevin Svenson (a contributing analyst to the on-chain analytics platform CryptoQuant), highlighted Bitcoin’s 20 month exponential moving averages (EMAs) as a potential source of future contention.

“Bitcoin spent six -> thirteen months below the 20m/EMA in previous cycles after it was broken down below it. He explained that we are currently experiencing our first month below 20m/EMA.

“If emotion is repeated, we will be below 20m/EMA (at minimum) until November 2022… and 13m by May 2023.”

BTC/USD 1-month candle charts (Bitstamp) – 20EMA Source: TradingView

Distribution by miners: “No trend”

The potential silver lining to Bitcoin was miner behavior.

Related: “Mega bullish signal” or “real breakdown?” 5 things you should know about Bitcoin this week

Despite warnings that the miners’ cost price has risen above spot, posing the risk of a capitulation like the bottom of the 2018 bear markets, data suggests that panic has not yet set in.

Venturefounder, a fellow CryptoQuant contributor, wrote that Bitcoin miners were regarded as smart money and speculators on the BTC markets.

“Bitcoin miners are not showing any trend in net distribution as the BTC price has recovered. In fact, the net accumulation trend that began in July 2021 is continuing.”

Annotated chart of Bitcoin miners BTC reserves Source: CryptoQuant

A chart was included that showed miners had increased their BTC reserves, particularly in the second half May.

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