Bitcoin price dips below $58,000 first time in two months

Bitcoin (BTC) price tumbled 4.4% within a frenetic 4-hour period on May 1, sliding below the $58,000 mark for the first time in 60 days. On-chain data reveals the major bearish catalysts, as reported by The Crypto Basis.

Why is Bitcoin Price Down Today?

Bitcoin price fell as low as $57,074 in the early GMT trading hours on May 1, as glowing Q1 earning reports from big tech companies drew investors’ attention to the stock markets, further exacerbating the BTC’s slowing market demand since the 2024 Halving.

The chart above shows the latest downswing has brought BTC below $58,000 mark for the first time in 60-days, dating back to Feb 28 2024. While the side-ways performance was attributed to weak post-halving demand, the ongoing downtrend appears to be driven by long-term investors actively exiting their BTC positions.

Long-term Holders Hit 10-day Peak Sell-Off

Looking beyond BTC’s 15% dip and millions of liquidations in the speculative markets, Bitcoin’s long-term holders’ bearish trading activity has been central to the price downtrend over the last two weeks.

Sentiments Age Consumed metric serves as a proxy for monitoring long-term holders’ on-chain activity. It multiplies the number of BTC coins traded on a given day by the number of days since they last moved. Age Consumed spikes when a higher number of previously long-held coins are on the move, and vice-versa.

As illustrated above, Bitcoin’s Age Consumed has been on a steady rise since April 20, signaling that many long-term holders started to offload their coins after the halving.

Bitcoin Age Consumed reached 14.37 million on April 30, representing a 471% surge from the 2.51 million recorded on April 20 Halving day. When long-term investors flood the market during periods of slow demand as observed above, it dilutes supply and heightens FUD (Fear Uncertainty and Doubt) among other stake holders.

Bitcoin (BTC) Price Forecast: Further Downswing toward $55,000?

Historically, Bitcoin price has often wobbled when BTC records significant spikes in Age Consumed appear. If this pattern repeats, the 471% surge recorded in the long-term holders’ in the last 10 days could be a precursor for a BTC price breakdown below $55,000 in the near term.

However, IntoTheBlock data shows that Bitcoin bears face an uphill task of overcoming the looming support buy-wall at $56,000.

As seen above, 590,360 existing holders had acquired 231,300 BTC at an average price of $56,100. If those holders make covering purchases to defend their positions, Bitcoin price could stage an instant rebound from that area. However, if the bears scale that key buy-wall, a Bitcoin price breakdown below $55,000 could be imminent.

On the contrary, with BTC now trading at its lowest in 60 days, strategic bulls traders could consider it is perfect timing to enter new positions. If this scenario plays out, the BTC price could target an instant rebound above $60,000. However, the initial sell-wall at $58,650 territory could invalidate this optimistic outlook.