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Bitcoin is down 2.7% over the last 24 hours after running into resistance above the $111,000 level, among other drivers, including significant long liquidations.
Key points:
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Bitcoin price fell 2.7% over the last 24 hours to $105,00 amid waning investor demand.
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Bitcoin’s drop on May 30 triggered more than $210 million in long BTC liquidations.
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A bearish divergence from the RSI signals a reduction in bullish momentum.
Bitcoin’s (BTC) price has dropped by over 2.70% over the last 24 hours to $105,150 as concerns over the progress of US-China trade talks emerge. Its daily trading volume has jumped by 20% to $60 billion, suggesting that the sell-side activity is intensifying.
Bitcoin price drops on waning demand
Bitcoin’s bearishness on May 30 is preceded by waning demand for the asset following its run to all-time highs above $111,000.
Some of Bitcoin’s demand metrics may have “reached a short-term top, which could imply a pause in the current rally,” said market intelligence firm CryptoQuant in its latest Weekly Crypto report.
According to the report, Bitcoin’s 30-day demand growth reached 229,000 BTC on May 28, near the previous demand growth peak of 279,000 BTC, marking the market top in December 2024.
Additionally, Bitcoin balances held in whale addresses have increased by 2.8% over the past month. This pace has historically preceded a slowdown in whale accumulation, suggesting waning demand from large investors.
This reduction in demand is reinforced by significant outflows from spot Bitcoin ETFs, which have accompanied the bearish performance displayed by BTC over the last 24 hours.
On May 29, the spot BTC ETFs saw a massive $358.65 million in outflows, ending a 10-day streak of inflows.
High outflows from spot Bitcoin ETFs after a long streak of inflows point to a shift in interest among institutional investors, adding to the sell-side pressure.
Over $210 million in long BTC positions liquidated
BTC’s drop on May 29 is accompanied by significant liquidations in the derivatives market, signaling strong bearish pressure.
Over $211.21 million worth of long Bitcoin positions have been liquidated over the last 24 hours alone, compared to $10.8 million in short liquidations. More than $114 million long BTC positions were liquidated over the last 12 hours alone, against just $5 million in short positions.
Bullish traders are forced to close their positions when long positions are liquidated. More than $680 million in leveraged positions were liquidated across crypto assets in the past 24 hours.
The scale of these liquidations mirrors the period between April 5 and April 6, when a total of $280 million in long BTC positions were wiped out, accompanied by an 8.5% drop in price over the same period.
Related: Bitcoin bull market ‘great validator’ comes as James Wynn loses $100M
Bitcoin’s bearish divergence
Bitcoin’s drop today precedes a period of growing bearish divergence between its price and the relative strength index (RSI).
The daily chart below shows that the BTC/USD pair rose between May 5 and May 28, forming higher lows. But, in the same period, its daily RSI descended from 76 to 54, forming lower lows, as shown in the daily chart below.
A divergence between rising prices and a falling RSI usually indicates weakness in the prevailing uptrend, prompting traders to sell more at local highs as profit-taking intensifies and buyer exhaustion sets in.
The chart above also reveals an area of stiff resistance on the upside, preventing BTC’s efforts to rise higher. This is the supplier congestion zone between $106,000 and the all-time highs above $111,000. Overhead pressure from this area is suppressing Bitcoin’s price.
Popular crypto analyst Willy Woo observed a similar divergence emerging in the weekly and said that if Bitcoin does not rally over the next two days, the price may sink deeper.
As Cointelegraph reported, Bitcoin is in a “healthy pause” that could see it consolidate around the $106,000 level before entering a new upward trend that could peak between $220,000 and $330,000.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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