Key Points
- Bitcoin’s price shows a positive trend, yet social metrics indicate weakness.
- High demand for Bitcoin in May could drive prices past the all-time high.
Bitcoin [BTC] experienced a significant week in terms of price movement, breaking past the local range high at $67k on 20th May.
On 23rd and 24th May, Bitcoin retested the $66.3k-$66.6k zone as support, bouncing higher to trade at $69.1k at the time of writing.
Increasing Demand for Bitcoin
There is a likelihood of further gains as the demand for this king of crypto continues to expand. Jack Mallers, CEO of the blockchain-based payments’ app Strike, stated that “Bitcoin is the best thing you can own” in a conversation with Antony Pompliano.
The Social Volume behind Bitcoin has been gradually declining since 11th March. The Weighted Sentiment remained negative throughout May, with two positive surges since mid-May, suggesting a decrease in social media engagement.
Reduced Selling Pressure
The daily activity also showed a downward trend since mid-March. The dormant circulation last saw large spikes on 18th April and 15th May. However, these did not match the ones in March or late February. This implies that the on-chain movement of dormant Bitcoin was recently absent, suggesting that a large wave of selling was not imminent. This is a positive sign as it indicates reduced selling pressure.
Crypto analyst Axel Adler posted that the demand was red-hot, based on the entity-adjusted transaction count. The demand was nearly at the levels of the 2016 rally. Adler also noted that the price of Bitcoin back then was $300, compared to $69.1k now, meaning the involved capital is vastly greater than eight years ago.
This demand from retail and institutional investors, coupled with a reduced selling pressure from the dormant circulation metric, suggests that Bitcoin is very likely to break out past the $71.4k region once again.
