Bitcoin Fails to Hold Above $27K: Price Vulnerable to Drop to $23K
• Bitcoin (BTC) price on May 29 surged to over $28,000 after news that the US lawmakers will soon pass a proposal to raise the debt ceiling.
• This surge was short-lived as BTC eroded all the 4 percent gains and now trades at $27,754.
• Short-term holders of Bitcoin have been selling at a profit, with the seven-day moving average of their spent output profit ratio (SOPR) moving back above 1.
Bitcoin Consolidates at $28,000
Bitcoin’s price failed to hold above the $27,500 level suggesting that it is vulnerable to dropping to $23,000 as whales capitalize on profit taking. On Monday, May 29th, Bitcoin surged past $28,000 following news of a proposal to raise the US debt ceiling but this increase was short lived and today BTC is trading 0.64% down at a price of $27,754 with a market cap of $538 billion.
Price Vulnerable To Drop To $23,000
The probability of Bitcoin dropping down further remains open and popular trader Crypto Tony believes this move could take it as low as 23K. Short positions started rising again indicating that short term holders are taking profits off their holdings. Blockchain analytics firm Glassnode shows that the seven-day moving average of the short-term holder’s (STH) spent output profit ratio (SOPR) has once again moved back again above 1 which signals signs of capitulation from these holders.
US Lawmakers Proposal To Raise Debt Ceiling
This week on Monday saw an increase in cryptocurrency prices across the board following news that US lawmakers were set to pass a proposal to raise the debt ceiling further. This increase in cryptocurrency prices however did not last long and soon enough BTC fell back eroding all its 4% gains made earlier in the day.
Short Term Holders Selling At Profit
Analysts from Blockware Solutions noted that since yesterday’s bounce short term holders have been selling at profits and this is bullish for near term price action because it shows capitulation from these traders. On chain data also showed that when STH SOPR readings rise above 1 it means that these short term holders are selling their BTC holdings for profits while readings below 1 indicate they are holding onto them or possibly even incurring losses if they sell them now .