Bitcoin (BTC): Why Holders Should Avoid Shorting Amidst Ongoing Market Turmoil

  • BTC ended the trading week with a 19% price drop.
  • Though renewed investor confidence would trigger a bullish divergence with S&P 500, things remained gloomy in the near term.

The previous week saw turbulence for the crypto market. While the FTX collapse news saw the bellwether crypto (Bitcoin) hitting 2-year lows, updates that consumer prices increased by 7.7% through October saw stock prices surging.

Santiment, an on-chain analytics site, revealed that S&P 500 ended the trading week near ten-week highs. While publishing this blog, S&P 500 hovered at $3,992, gaining 1% within 24 hours. Moreover, Gold closed the trading week at a twelve-week peak, hovering at $1,774 during this publication. Gold has gained approximately 6% within the last five days.

Nevertheless, leading digital coins, Bitcoin and Ethereum, presented varying performances, according to Santiment. While the dominant crypto lost 19% within the last five days, Ethereum surrendered 20% within that timeframe.

Santiment confirmed that the crypto market prints a bullish divergence with the S&P 500 as the former attempts revival from the latest unfortunate events in cryptocurrency.

How Is BTC Positioned?

While publishing this content, BTC changed hands at around $16.669.77. Coinmarketcap data shows the leading cryptocurrency plummeted by 4% within the past day, whereas its trading volume plummeted by 33% in that timeframe.

That shows token holders are less confident about more price upticks in the near term and have decided to distribute their holdings. Primary indicators on its daily chat show BTC massively oversold. While writing this content, Bitcoin’s MFI (Money Flow Index) stayed deep within the oversold territory, reading 24.

The RSI (Relative Strength Index) flashed similar readings, maintaining downtrends at 34. Fewer buyers within the market translated to amplified selling pressure, forcing the CMF (Chaikin Money Flow) beneath the center line, standing at -0.10.

Moreover, Santiment confirmed that BTC explored negative sentiment during this publication. Bitcoin’s weighted sentiment remained negative at -0.276 in this writing. That reflected that most holders endured losses.

Bitcoin’s 7d MVRV (Market Value-Realized Value) hovered at -4.175%. That confirmed that any holder selling BTC at current prices would suffer losses.