Bitcoin has plunged for two consecutive days. Will it go bullish or bearish next?

Data from the Bitpush terminal showed that the price of Bitcoin plunged for two consecutive days. In the past 24 hours, the cryptocurrency with the largest market value fell below the support level of US$50,000, a drop of nearly 10%, and its market value share fell to 40.64%.

The price of bitcoin has fallen 17% since Sunday and is on track for its worst weekly performance since February.

According to an article published by Forbes, the latest data from CME Group shows that asset managers (a type of institutional investors including pension funds) are using CME Group Bitcoin futures to deploy more and more "short" positions, betting on a fall in Bitcoin prices. The value of these short contracts has increased from $0 in early January to $380 million last week, the highest level since the portfolio began to be recorded.

Skew data also shows that a large number of liquidations occurred in the futures market in the past 24 hours, with the highest liquidation of more than 400 million US dollars at around 6 am Beijing time on May 13.

Pankaj Balani, CEO of Delta Exchange, said: “Technical indicators show that Bitcoin is very weak, without any obvious positive catalyst to push BTC up.”

However, Glassnode data shows that the Bitcoin supply owned by long-term holders (HODLers) has shown an accumulation pattern (as shown in the figure below). Although it looks similar to the peak in 2017, the current circulation held by HODLers has increased by more than 8%. This means that every time the price drops, long-term HODLers are increasing their holdings, which reflects the strong consensus attribute of Bitcoin. For example, MicroStrategy, which combines knowledge and action, has hoarded 271 BTC again.

On-chain analyst Willy Woo pointed out that the waterfall phenomenon caused by Musk's tweet is recovering. The net inflow (sell) of the exchange is turning into outflow (buy).

Some analysts continue to be bullish, saying that the Bitcoin price remains above the 21-week EMA, with support at $47,100 and $42,930. If the price does not fall below these support levels, the weekly data targets will be $74,300 and $86,600.

Analyst Denys Serhiichuk believes that even though the chances of further declines remain high, with the increase in buying volume, it is very likely to see bulls test $53,500. However, there is a lot of resistance on the upside for bulls, and the rebound may be a short-lived correction after a sharp sell-off, rather than the start of a new uptrend.

Best-selling author and Twitter influencer Jimmy Song is a staunch supporter of Bitcoin. He said: "Every time a bull run starts, new people get excited about certain celebrities buying Bitcoin. Don't be like that. Bitcoin does not need their verification, endorsement, or funds. Instead, they need Bitcoin."

Image source: Bitpush Terminal/Twitter

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