Bitcoin (BTC), which suffered a significant dip at Wall Street’s May 26th open, recovered quickly as the market exhausted all buy support.
BTC/USD 1-day candle chart (Bitstamp). Source: TradingView
Bitcoin volume rises, with more to come
Cointelegraph Markets Pro and TradingView data showed that BTC/USD dropped to $28,000 on Bitstamp, its lowest level since May 12, and the Terra LUNA Implosion.
The day had begun with progress to the negative, culminating in a liquidity grab which saw 24-hour BTC liquidations reach $117 million.
BTC liquidations chart. Source: Coinglass
The rebound was followed by a rise to $29,000 where Bitcoin was traded at the time.
Michael van de Poppe (Cointelegraph contributor) felt that the move to fill bids was sufficient to provide some new upside.
We can now go up, as all liquidity has been taken on the upside. Let’s go!
— Michael van de Poppe (@CryptoMichNL) May 26, 2022
He also stated that the BTC/USD targets he had set — $32,800, $35,000 — were still in effect.
Analyzing order books data, Material Indicators, an on-chain monitoring resource, warned that a future dip could be less resistant due to the low liquidity.
“We’re seeing a lot of Bitcoin liquidity changing hands right now. It said that every time a bid wall appears it is absorbed.” The tweet was shared alongside a chart from Binance, a major cryptocurrency exchange.
“Currently, there are no bid walls and there is only $122M between $28k and $25k. We expect to see more BTC move onto chain.
BTC/USD Order Book Chart (Binance). Source: Material Indicators/Twitter
Il Capo of Crypto, a fellow trading account, continues to have a conservative outlook regarding near-term price action. Based on order book performance, he predicted that the current bounce will be the “last bulltrap” before a return of $25,000
The volume return to BTC/USD markets on May 26 made it stand out among other trading days. Cointelegraph reported that analysts were becoming more concerned about its absence.
Bitcoin’s “most significant chart” offers hope for recovery
Market commentators looked further out to find signs of a change in Bitcoin’s trend.
Related: Bitcoin price could bottom at $15.5K, if it retests its lifetime historical support level
Root, a popular analyst, believes that these signs were caused by the behavior of LTHs (long-term holders) at the time.
On-chain data shows that LTHs are finally slowing down sales of BTC as their cost basis has risen. The cost basis is the price at which LTH accounts bought BTC in aggregate. If it falls, it indicates declining LTH resolve.
Root commented in a Twitter thread that the data was “perhaps the most significant chart in BTC at the moment.”
It wrote, “For the last months, we’ve experienced LTH capitulation — demonstrated by the rapidly falling LTH cost Basis.”
An uptick is the first sign that LTHs have stopped giving up! Not a trend change, but an early sign!
He said that LTH entities that were selling BTC at the top were the ones who bought it, and that sales had a capitulatory quality.
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