Bitcoin is on the verge of a bearish turn, according to a leading crypto analytics firm. Santiment says five indicators are flashing warning signs, even though the king crypto is making moves closer to the $30,000 price level.
According to Santiment, the trading volume is cooling off, there’s been a decrease in market dominance, the number of active addresses is dropping, the average transaction value is decreasing, and the number of Bitcoin transactions is dropping.
The recent rally saw pretty decent trading volume coming in at the start, which is a healthy sign. However, things started to slow down a little as we inch higher.
Now we are observing a divergence in Price and Volume, which usually isn’t a good thing as it is signaling that there’s exhaustion in the price action. Sentiment says that the Social Volume and Social Dominance indicator is at a high level, which historically indicates the top of a price rally has arrived.
BTC’s Social Volume and Social Dominance are at their highest level in a year, indicating that the crowd is getting somewhat excited. This usually precedes a local top.
According to Santiment, the third bearish indicator is that long-term holders of Bitcoin are starting to become active again.
“Since mid-March, we saw two such spikes, between 2,800 and 3,000 BTC that are pretty long-term (five years) being activated. Could it be due to the crypto crackdown or CTFC [Commodity Futures Trading Commission] investigations? Who knows, but it is definitely something to keep an eye on.”