bitcoin price stabilizes while accumulation remains

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The price of bitcoin ends the week in the process of consolidation around USD 29,000, after a fall last Wednesday, May 18 in conjunction with the most important stocks and indices. This retreat of the markets began on Tuesday, the 17th, with the publication of the quarterly results of the Walmart chain of stores, where it was recorded that the profits were lower than projected.

Walmart’s shares fell 11% last Tuesday, and with the announcement, the next day, there was the fall in sales and profits of Target, another important retail chain, which spread a bearish wave in other sectors of the economy.

The Dow Jones, S&P 500 and Nasdaq indices were affected, which fell on Wednesday 3.57%, 4.04% and 4.74%, respectively, this being the largest decline since 2020. Due to the high correlation it maintains with traditional assets, bitcoin also declined on Wednesday, although its pullback was limited to 2.94%.

Bitcoin accumulation is accentuated

The Glassnode report, Week on Chain, last Monday, May 16, pointed out that the price of bitcoin had approached the realized or cash price of bitcoin on Thursday, May 12.

The realized price is obtained by dividing the sum of the values of all currencies at the moment when they last moved, by the circulating supply. Because it constitutes a kind of historical average of the price, this metric is considered a strong support of the bitcoin price.

Glassnode shows in the graph an update of its Bitcoin Accumulation Score (ATS) metric. The darker colors on the price curve reflect that a greater proportion of market participants are accumulating. If this accumulation trend continues, it is possible that the price will remain stable and may even register a rebound.

Historical indicator points to USD 20,000 floor

With the bitcoin price struggling to overcome the $30,000 resistance, many market participants are wondering if it will be able to fall to lower levels. This Friday, Criptonews examines the 200-week moving average, which would indicate that the price of bitcoin could not fall below USD 20,000.

The chart shows that only in the pronounced bearish phase of March 2020, the price of bitcoin was below the mentioned moving average (blue on the chart). Currently the curve is just below USD 22,000 and is on the rise, therefore, it is very unlikely that the current price will manage to fall below the $ 20,000 mark.

Bitcoin would reach one million dollars as legal tender

According to the statements to CriptoNeticias of Herminio Fernández, the founder and CEO of EurocoinPay, in the event that bitcoin became legal tender in the world “it would be the best store of value and the best money that society has ever known.”

As there are about USD 21 trillion issued globally, the executive believes that when bitcoin reaches the status of a global currency, it would absorb all that fiat currency. As its issuance is limited to 21 million BTC, so the price of 1 bitcoin would be 1 million dollars, affirms Fernández.

The specialist stressed that the value of BTC would be even higher, if you count the part that would capitalize on the gold market as a store of value. He believes that cryptocurrency is safer and easier to transport, as well as a better unit of account and means of payment than gold.

Featured graphic of the week

Moving averages, in addition to revealing trends, have served, as noted above, to indicate support levels. In the chart below, there is another approximation to the 200-week moving average curve mentioned above. This is the 140-week moving average, as an indicator of effective support, although in this case, as seen on the chart, the price if it makes contact with that moving average.

Every time the price touches or crosses down that moving average, it registers a significant recovery.. In the current bearish phase, the price is initiating contact with the mentioned moving average. It does not mean that the price cannot fall further, but a next recovery would be expected, according to historical data.

Bitcoin’s biggest drop is coming, but with a rebound to new heights

In opposition to what is inferred from the previous graph, economist Harry Dent, who had already foreseen the current fall of the markets, including that of cryptocurrencies, assured, in statements commented by CriptoNeticias, that bitcoin’s recent recovery margin will not be sustainable over time.

“This is not a correction. This is the beginning of a prolonged bear market,” says Dent, who believes that the recovery would begin in 2024, but that before, the BTC price would fall to values between $3,000 and $7,000. This is a risky prediction because it implies that bitcoin would fall to levels of the previous cycle, something that has not happened so far.

The fall of bitcoin is not so dramatic, say Latin American bitcoiners

This Friday, the 20th, the virtual event “How to survive the crypto winter” was held, organized by the Ibero-American Blockchain Alliance, and in which Iván Tello, co-founder of the Argentine exchange Decrypto, Rodolfo Andragnes, of the NGO Bitcoin Argentina, and Matías Bari, CEO of SatoshiTango, participated.

Tello stated that it is necessary to “dedramatize” the fall of bitcoin and gave as an example, that this Friday, May 20, the shares of the MercadoLibre company fell more than BTC itself. The panelists advised investors to “become aware” about bitcoin and the market in order to be able to trade comfortably.