Key Points
- Bitcoin’s [BTC] week-long bull rally has halted as selling sentiment dominates the market.
- Despite a key indicator hinting at a trend reversal, other metrics remain bearish.
Bitcoin’s [BTC] bullish momentum seems to have paused as its daily chart turned red over the past few hours. The cryptocurrency lost some steam between May 16 and 17, following a sell signal on its price chart. This raises the question of whether this trend is likely to persist in the near term.
Bitcoin’s Weekly Rally
As per CoinMarketCap, Bitcoin enjoyed a steady weekly rally, with its price increasing by more than 4%. This uptrend allowed BTC to reach as high as $66k. However, the emergence of a sell signal soon put a brake on this ascent.
Crypto analyst Ali highlighted this development in a tweet, predicting one to four candlestick corrections for BTC. As it turned out, the prediction was spot on, with the price of the leading cryptocurrency dropping by 0.71%. At the time of writing, BTC was trading at $65,464.76, with a market capitalization exceeding $1.29 trillion.
Market Sentiment
Data from CryptoQuant suggested that more investors are currently selling BTC at a profit, as indicated by the red aSORP. This could signal a market top in the midst of a bull market. Furthermore, the Net Unrealized Profit and Loss (NULP) indicated that investors are in a belief phase, currently experiencing high unrealized profits.
Selling sentiment appears to be prevalent across the market, with BTC’s net deposit on exchanges being high compared to the past week’s average. Glassnode’s data revealed another bearish metric, with Bitcoin’s accumulation trend score standing at 0.0061, suggesting that investors are not actively accumulating BTC.
An analysis of BTC’s 4-hour chart suggested that BTC is currently testing its resistance at $65.6k. If it manages to break out above this level, it could turn bullish again. However, the Relative Strength Index (RSI) registered a decline, which could indicate that BTC might struggle to breach its resistance in the short term.
