For nine weeks in a row, the red candles of technical analysis confirmed the bearish mood in the cryptocurrency market. Fear Index&Greed in May showed a gloomy investor mood at the level of 10/100 and even repeated the March 2020 indicator (8/100).
At the beginning of the closing week of spring, Bitcoin lit a green candle and broke the level of 30 thousand dollars. Today, on May 31, investor sentiment has improved (16/100), the price of the flagship cryptocurrency has overcome key resistance and reached the level of $31,880.
This is the highest Bitcoin price since May 11, after which the market collapsed, provoked by the collapse of the Terra ecosystem.
The three-week period of consolidation of the Bitcoin market, according to Glassnode analytics, was accompanied by the accumulation of cryptocurrencies by individual network entities, and had a significant difference from the previous period (January - April), which expressed the conviction of hodlers in cryptocurrency.
The aggregate balance of cryptocurrency holders with a balance of less than 100 BTC increased by 80,724 BTC in May, which is surprisingly close to the volume of 80,081 BTC that LUNA Foundation Guard (LFG) sold to maintain its algorithmic stablecoin TerraUSD (UST), which crashed.
Whales with assets of more than 10 thousand BTC coins replenished their total balance by 46,269 BTC during May, including through the LUNA Foundation Guard sales of their Bitcoin reserves.
LFG sales with losses reduced the total capitalization of the network and led to the redistribution of cryptocurrencies into other hands.
The structure of Bitcoin holders certainly affects the behavior of cryptocurrencies. But, since Bitcoin has already become a global asset, the actions of the hodlers are increasingly correlated with the situation at the macroeconomic level.
Given the global economic challenges, with low purchasing demand from retail investors and unstable support for the Bitcoin price from institutional investors, Bitcoin's movement can most likely be seen as a rebound, rather than the beginning of a bullish rally. Bitcoin derivatives markets have also confirmed the bearish mood so far.
Further testing of Bitcoin deeper price levels is not excluded.
The Whalemap tracker, which tracks the behavior of whales, is moderately optimistic and believes that Bitcoin has not yet reached a real macroeconomic bottom.
Analysts are still more inclined to consider three weeks of sideways price movement against the background of extreme fear as a period of formation of a cyclical price bottom.
Now the Bitcoin price, having moved to a higher level, continued to consolidate.