After trading under $30,000 for almost a week, Bitcoin registered a strong bullish divergence on late Sunday, May 22. As of press time, Bitcoin is trading 2.5% up above its crucial resistance of $30,000 levels. Popular crypto analyst Lark Davis writes:
Bitcoin putting in a HUGE bullish divergence on the daily. The last time we had something like this happen was in 2021. Could this indicate a big rally brewing?
Davis further adds that although the global macro setup is currently worrisome, there’s some hope after all the bearish sentiment. It will be interesting to see whether Bitcoin could flip this resistance into a strong support zone. Historically, $30,000 has served as a critical support level for Bitcoin.
Spotting the trendline of lower highs and lower lows, Davis notes that we can possibly see a relief rally up to $37,000. By this time, we could also be moving closer to the 200-day moving average. But this could also mean a possibility of Bitcoin price slipping to a low of $22,000 before giving a decisive breakout on the upside.
What if this is what happens for #bitcoin over the next couple months? pic.twitter.com/e9pw6gSiM3
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— Lark Davis (@TheCryptoLark) May 23, 2022
Bitcoin On-chain Metrics
The on-chain metrics for Bitcoin continue to show strength at a fundamental level. The total Bitcoin addresses holding more than 1 Bitcoin has reached a new all-time high moving closer to 1 million.
844,906 total #bitcoin addresses with more than 1 #bitcoin, a new record high! pic.twitter.com/pXSGwCQBqN
— Lark Davis (@TheCryptoLark) May 23, 2022
While the Bitcoin Fear and Greed Index continues to remain in the extreme fear zone, whales have been doing some bottom fishing. As per data from Glassnode, Bitcoin whale addresses holding more than 10K BTC have been on the rise during the recent market crash.
Whales like to accumulate #Bitcoin while fear is ruling in the #crypto market. pic.twitter.com/DX8SRYv6uD
— Crypto Rover (@rovercrc) May 22, 2022
This makes it clear that weak hands have been exiting the market and handing over their supplies to the big whales of the market. One area of caution will be the surge in the Bitcoin supply at the exchanges. However, that’s been part of every bear market. Now that investors have already tasted enough blood, a bullish reversal could be healthy.
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