The cryptocurrency market is heating up after nearly two months of a downtrend as bullish divergences surge as signals of a possible reversal. Finbold has gathered data on May 10, identifying these signals to help crypto investors navigate these times.
Notably, TradingView‘s total crypto market cap index is now valued at $2.19 trillion, testing a short-term uptrend support. Since April 12, the index has traded below the 30-day exponential moving average (30-EMA), creating resistance at $2.285 trillion. A breakout from this level could propel the market to this year’s highs at $2.72 trillion.
Moreover, its downtrend has been since March 14 but could soon be challenged by growing momentum. The daily relative strength index (RSI) signals this possible reversal by breaking out from its downtrend in a bullish divergence.
Total Crypto Market Cap, daily. Source: TradingView / Finbold
Bullish divergence: Retail stops buying, whales accumulate
Looking at social indicators on Santiment, the social volume and dominance of the word “buy” have dropped to yearly lows. Under the proper conditions, this momentary lack of interest is usually associated with bottom formations.
Social context for “buy.” Source: Santiment / Finbold
Santiment‘s leading analyst, Brian Q, has reached a similar conclusion regarding the crowd’s “buy the dip” chants.
? Traders are showing weak #buythedip interest in #Bitcoin's latest retrace down to as low as $60.2K today. Generally, the crowd's lack of faith is a strong sign of prices being close to a #bottom. Track social interest levels to see if #FUD stays high. https://t.co/cZjTWcCnL2 pic.twitter.com/Nj19XkIdgq
— Santiment (@santimentfeed) May 10, 2024Additionally, another bullish divergence lies in Bitcoin’s (BTC) significant drop in social volume, while the leading cryptocurrency’s whales hold record percentages of the supply. As of this writing, BTC is trading at $60,550, testing key support at a solid range low.
Bitcoin social volume and whale’s accumulation. Source: Santiment / Finbold
From a world’s regulatory perspective, optimism is surging in India as it reopened its doors to offshore cryptocurrency exchanges like Binance and Kucoin. Conversely, a regulatory crackdown in the United States has led to the withdrawal of popular Bitcoin wallets.
Despite the aforementioned signals, cryptocurrencies remain a highly volatile asset class. Thus, investors must remain cautious while navigating these turbulent waters, looking ahead for fundamental demand and capital inflow as organic signals for long-term price appreciation and sustainability.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk
