On Monday, May 22, Bitcoin (BTC) and the broader cryptocurrency market showed a mild bounceback despite the negative sentiment in the market. At the time of writing, Bitcoin (BTC) is trading 2.72% up at a price of $27,382 and a market cap of $530 billion. Other altcoins like Ethereum (ETH) and the top ten have also gained anywhere between 3-4% over the last 24 hours. However, investors should maintain caution as weekly trading volumes for some of the top digital assets have dropped to historically low levels. On-chain data provider Santiment reported that the largest assets in crypto are seeing historically low levels of weekly trading volume, especially for altcoins. When combining just BTC and ETH volume, this is the 2nd lowest threshold since September 2019.
Thus, it will be interesting to see whether Bitcoin and other altcoins will continue the rally. For the Bitcoin price to confirm the bullish momentum going ahead, it must close above $27,640 levels. A sustained 4-hour candlestick close above $27,640 is required to confirm a bullish breakout.
However, the overall crypto market sentiment has been negative after a strong rally earlier this year. Crypto assets have come under selling pressure, with Bitcoin facing multiple rejections at the $30,000 level over the last few weeks. Last week marked the fifth consecutive week of outflows from the crypto market, with a total of USD 32 million flying out of cryptocurrency investment products. Crypto analytics firm CoinShares reported that volumes totaled US$900m for the week, 40% below this year’s average. Volumes for the broader market on trusted exchanges hit their lowest level since late-2020 at US$20bn for the week.
The total outflows of USD 33 million from Bitcoin investment products last week represent the most negative sentiment over the last five weeks. The combined outflows in the BTC investment products over these weeks stand at US$235m. This negative market sentiment can be attributed to multiple factors. One of them could be concerns over the US defaulting on its debt. JPMorgan chief Jamie Dimon recently said that there could be a major crash in the market if the debt talks go wrong.
In conclusion, the cryptocurrency market has currently been under pressure, with Bitcoin facing difficulties to maintain a bullish momentum above $30,000. Investors should exercise caution while observing how the market performs in the coming weeks. The author or the publication does not hold any responsibility for personal financial loss and opinions presented are subject to market conditions. It’s crucial to conduct thorough market research before investing in cryptocurrencies.