According to Cointelegraph: Bitcoin (BTC) Traders Eye $50K as BTC Drops Below Crucial Support Level

BTC/USD daily chart. Source: TradingView

The persistent correction phase of Bitcoin (BTC), which saw a 5.42% fall within the last 24 hours to reach a new multi-week low at $57,151 on May 1, may continue to put pressure on (BTC) to reach new lows. A decrease in Bitcoin (BTC) demand growth coupled with an upsurge in short positions in the futures market are identified as factors behind (BTC)'s current decline, as highlighted by on-chain data from CryptoQuant.

Bitcoin demand from accumulated addresses. Source: CryptoQuant

CryptoQuant's report suggests that demand from permanent holders (those who buy BTC and never sell) fell by 50% in April, dropping from over 200,000 BTC in late March to about 90,000 BTC.

Monthly change in total Bitcoin whale holdings. Source: CryptoQuant

Declining demand from major investors, or "whale" investors, has been observed since late March, typically indicating a potential BTC price correction. Spot ETF purchases in the U.S., adding to sell-side pressure, have also reduced.

Bitcoin funding rates. Source: CryptoQuant

On the trading side, the unwillingness to pay premiums for opening long positions is indicative of declining Bitcoin demand. With traders opening short positions due to expectations of further price drops, Bitcoin's funding rate has hit a yearly low.

Market watchers are wondering where Bitcoin's bottom may lie before a trend reversal occurs. CryptoQuant analysts identified a $55,000 to $57,000 target area, while popular analyst Scott Melker anticipates a short-term bottom at about $52,000 for BTC.

Bitcoin STH realized profit/loss. Source: CryptoQuant

As Melker points out, Bitcoin's prevailing price correction remains mild for a bull market and the daily RSI hasn't yet reached oversold levels. Meanwhile, other market voices, such as trader and analyst Mags, warn that a weekly close below $60,000 could trigger a significant pullback, potentially as low as $40,000.

Source: Tuur Demeester