TLDR
- CryptoQuant said Bitcoin tested its 200-day moving average near $82,400 and warned of a potential downturn.
- The firm noted that similar conditions in March 2022 led to a renewed decline in the Bitcoin price.
- Tradersā unrealized profit margins reached 17.7%, which may increase selling pressure.
- Daily realized profits surged as traders sold 14,600 Bitcoin worth nearly $1.2 billion on May 4.
- CryptoQuant identified $70,000 as the next key support level if Bitcoin price declines further.
Bitcoin price approached a key technical barrier this week as CryptoQuant warned of a possible downturn. The firm said the asset tested its 200-day moving average near $82,400. It added that past cycles show similar setups led to renewed declines.
Bitcoin Price Tests 200-day Moving Average Barrier
Bitcoin price rallied for six weeks after dropping to $66,000 in early April. It then touched its 200-day moving average around $82,400, according to CryptoQuant. The firm said this level acted as firm resistance during the 2022 bear market.
CryptoQuant stated, āThe 200-day MA was a major resistance in the 2022 bear market.ā It added that the price resumed its downward trend after hitting that mark in March 2022. The firm said the current structure raises whether history will repeat itself.
The report said tradersā unrealized profit margins reached 17.7% on May 5. It described this reading as the highest since June last year. The firm said these levels may trigger selling as traders lock in gains.
āThese margin levels mirror those seen in March 2022,ā CryptoQuant said. It added that Bitcoin resumed its decline after testing the same moving average then. The firm linked those conditions to potential short-term pressure.
Bitcoin fell 2.3% over the last 24 hours to trade near $79,300. The decline followed a recent rally as traders returned to risk assets. The move also came after US producer prices rose 1.4% in April.
Profit-taking Rises as Support Forms Near $70,000
CryptoQuant reported that daily realized profits jumped to their highest since early December. Traders sold 14,600 Bitcoin on May 4, worth nearly $1.2 billion. The firm said such spikes often appear before local tops during bear rallies.
āHistorically, spikes of this magnitude in bear market rallies have preceded local price tops,ā CryptoQuant said. It linked the surge in realized profits to growing selling activity. The data showed traders moved coins to exchanges during that period.
The firm identified $70,000 as the next key support if prices fall further. It described this level as the average price at which all Bitcoins last changed hands. CryptoQuant said this zone has acted as resistance turned support in past cycles.
āIt represents the average cost basis of short-term traders,ā the firm said. It added that profit margins compress toward zero near that level. The firm said reduced unrealized gains could ease selling pressure.
Some market participants shared a different view on the short-term direction. MN Capital founder MichaĆ«l van de Poppe said Bitcoin āmight see a fast moveā to $90,000. He linked that outlook to potential US Senate progress on the CLARITY Act.
Arthur Hayes, chief investment officer at Maelstrom, projected higher levels. He said reclaiming the all-time peak of $126,000 was a āforegone conclusion.ā Hayes cited inflation risks tied to US economic policy and geopolitical tensions.
