Bitcoin Faces a Setback: Price Drops as Whale Accumulation Slows and Trade Talks Worry Investors

The fall in Bitcoin’s price by 2.7% over the past 24 hours to $105,150 has triggered over $210 million in long Bitcoin (BTC) liquidations. This downturn was primarily due to declining investor demand. A significant bearish divergence from the relative strength index (RSI) further underscores the dwindling bullish momentum.

Details of Bitcoin Price Fall

BTC’s price decrease is over 2.7% in the last 24 hours, causing anxiety among investors over the potential hiccup in US-China trade talks. This setback has led to an increase in the daily trading volume to $60 billion, suggesting an escalated sell-side action.

May’s Decline and Outlook

May 30th saw a distinctly bearish tone for Bitcoin due to diminishing demand subsequent to its streak to all-time highs surpassing $111,000. Market intelligence company CryptoQuant, in its recent Weekly Crypto report, expressed a possibility for a pause in the ongoing rally, pointing out that some of Bitcoin’s demand markers may have reached a short-term peak.

Bitcoin Demand Metrics

According to CryptoQuant’s report, Bitcoin’s 30-day demand expansion arrived at 229,000 BTC on May 28, this was in close proximity to the prior demand upsurge climax of 279,000 BTC. This earlier peak had signaled the market top in December 2024. Other relevant data includes the 2.8% increase over the last month in Bitcoin balances held in whale addresses. This increase has traditionally indicated a slowdown in whale accumulation, suggesting a depreciation in demand from significant investors.

Spot Bitcoin ETF’s Outflows

Spot Bitcoin ETFs have seen significant outflows that echo the bearish performance shown by BTC over the last day. On May 29, spot BTC ETFs witnessed an outflow of $358.65 million, ending ten days of consecutive inflows. The high outflows from spot Bitcoin ETFs after a prolonged period of inflows indicate a shift in interest among institutional investors and add to the sell-side pressure.

Counteracting Impacts of Derivatives Market and Liquidations

The drop of BTC on May 29 is followed by massive liquidations in derivatives market, indicating a strong bearish force. More than $211.21 million in long Bitcoin positions were liquidated just in the last 24 hours, compared to $10.8 million in short liquidations. These liquidations significantly mirror the period between April 5 and April 6 when $280 million in long BTC positions were eliminated, accompanied by an 8.5% price drop.

Forecasts Based on Divergence and Resistance

The drop in Bitcoin’s value is also followed by a growing bearish divergence between its price and the relative strength index (RSI). The growing bearish divergence along with an area of stiff resistance on the upside shows weakness in the prevailing uptrend. If Bitcoin does not rally in the next two days, it could sink even further. However, analysts suggest Bitcoin is in a healthy pause that could see it consolidate around $106,000 before embarking on a new upward trend that could peak between $220,000 and $330,000. Every investment and trading move involve risks, and thus, investors should conduct their extensive research when making a decision.