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Bitcoin Faces Major Test As 37% Recovery Collides With Bear Resistance

Traders cashed out nearly $1.2 billion worth of Bitcoin in a single day last week — a sign that the recent recovery may be running out of steam.

On May 4, investors sold 14,600 Bitcoin, pushing daily realized profits to their highest point since early December.

根据 CryptoQuant, that kind of selling spike during a bear market rally has historically marked a local price top.

A Rally Under Pressure

比特币 climbed roughly 37% over six weeks, rising from $66,000 in early April to briefly touch $82,380. That level lines up with the cryptocurrency’s 200-day moving average — a technical marker that proved to be a wall during the 2022 bear market.

Back then, Bitcoin hit that same average in March before sliding further into a prolonged decline. CryptoQuant’s latest research draws a direct line between that episode and today’s setup.

Unrealized profits among traders also spiked during the recent run-up. On May 5, profit margins reached over 17%, the highest reading since June of last year.

Data shows that figure mirrors conditions last seen in March 2022 — right before Bitcoin resumed its fall.

The combination of profit-taking and a historically significant resistance level has prompted CryptoQuant to flag the possibility of a trend reversal.

Inflation Data Adds To The Pressure

Outside the crypto market, broader economic signals are adding to the uncertainty. The US Labor Department reported that producer prices rose 1.4% in April, the steepest increase in four years.

Bitcoin has grown more sensitive to US economic data as Wall Street adoption has expanded, and the inflation report pushed the price down 2.3% in 24 hours to around $79,250.

If selling pressure does push Bitcoin lower, CryptoQuant puts the next major support around $70,000. That level reflects the average price at which all Bitcoin was last transacted and has historically shifted from resistance to support during bear markets.

At that point, short-term traders would have little unrealized profit left, removing much of the incentive to sell.

Bulls Still See A Different Path

Not everyone reads the charts the same way. MN Capital founder Michaël van de Poppe said Bitcoin could make a fast move to $90,000 if the US Senate advances the CLARITY Act, a long-awaited piece of crypto legislation.

A return to Bitcoin’s all-time high of $126,000 is seen as almost inevitable, according to Maelstrom investment chief Arthur Hayes

Hayes pointed to money printing pressures linked to the Iran conflict and the escalating US-China race in artificial intelligence as key catalysts.

Both views reflect the sharp divide among market watchers as Bitcoin sits at a critical juncture.

Featured image from Mint, chart from TradingView


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