Bitcoin (BTC) came back with a vengeance on May 13 as bulls stepped in to take the market to near $31,000.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Bitcoin RSI stays firmly oversold
After “kissing” its realized price at $24,000, Bitcoin showed no taste for fresh bearishness as record on-chain volume combined with coins leaving exchanges en masse.
On May 11 and May 12 alone, exchange balances declined by over 24,335 BTC, according to data from on-chain analytics platform CryptoQuant covering 21 major platforms.
Outflows were much higher at nearly 168,000 BTC over the same period, but inflows from those seeking to sell were equally intense as panic set in over Terra’s LUNA and TerraUSD (UST) tokens, as well as largest stablecoin Tether (USDT).
Bitcoin exchange netflows chart. Source: CryptoQuant
As LUNA went to nearly zero and its blockchain was halted, Bitcoin nonetheless strengthened as the immediate impact of the instability waned.
“This is a hell of a reversal candle,” popular trader and TradingView author CryptoBullet reacted as part of Twitter comments.
This is a hell of a reversal candle
Dragonfly Doji on the highest Volume of the year
+ bullish divergence on RSI
– CryptoBullet (@CryptoBullet1) May 13, 2022
Bitcoin’s relative strength index (RSI) referred to by CryptoBullet measured 31 at the time of writing, still in oversold territory and its lowest since January.
BTC/USD 1-day candle chart (Bitstamp) with RSI. Source: TradingView
$14,000 still on the table?
As the dust settled on Terra, LUNA and UST, however, not everyone was convinced that the worst was over.
Among them was the official @Bitcoin Twitter account, which like several others noted that even the week’s lows did not represent a “classic” maximum drawdown versus all-time highs.
“The $BTC all-time high is $68,990. An 80% draw-down is $13,798. $27k is about halfway there,” it posted on the day.
“This is Bitcoin. Be prepared.”
Data from on-chain analytics firm Glassnode meanwhile put the latest BTC price dip in historical context.
Bitcoin drawdown from all-time highs chart. Source: Glassnode
As Cointelegraph reported, MicroStrategy, the company with the largest Bitcoin treasury, hinted that it would buy into any significant weakness toward $20,000 in an attempt to support the market.
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