The classic “Sell in May and walk away” strategy came to the fore once again this year in Bitcoin’s May price movements. The monthly candlestick chart closed with a long-wicked Shooting Star formation after the strong sell-off at $82,500. This outlook indicated that the upward movement was losing strength and selling pressure was increasing in the market.
Significant selling pressure in May
Bitcoin, which reached the level of $ 82,500 in the middle month, then retreated rapidly and fell to around $ 75,650 towards the end of May. The rejection of the price rise and the subsequent sharp decline showed that there was a serious supply pressure above. Technically known as a “Shooting Star,” this candle formation is often considered a classic sign that bull momentum is starting to wear off and sellers are taking control.
It is stated that this formation, which is frequently encountered in Bitcoin analyses, shows that bullish attempts have weakened and a selling tendency has now come to the fore in the market.
The technical signal was accompanied by on-chain data. On May 8, the STH MVRV indicator failed to rise above the 1.0 level. This ratio shows the profit or loss position of short-term investors, and the fact that it continued to remain below 1 indicated that those who made recent purchases were still at a loss.
Mini dictionary: What is STH MVRV, what does it indicate? STH MVRV (Short-Term Holder Market Value to Realized Value) is a ratio that shows whether short-term investors will make a profit or a loss if they sell their Bitcoin at the current price. Above 1 means profit, while below 1 indicates loss position.
Weakening in global demand
Important indicators regarding investor demand also revealed that the market has cooled. “Coinbase Premium”, the price difference monitored on the US-based Coinbase exchange, dropped to -0.136 and approached the lowest levels of recent times. This level shows that the strong buying desire from US institutional investors has decreased.
Similarly, on the Asian side, the Korean Premium index dropped to an extraordinarily negative point at -2.1. It has been noted that Korean individual investors, although historically one of the most active groups, have acted cautiously recently. The simultaneous drop in demand in both the East and West has created rare weak market conditions for Bitcoin.
Large-scale sales on the corporate side
On the institutional investor side, there was another remarkable development. On May 26, a sale transaction took place in the IBIT spot Bitcoin ETF product in a closed pool (“dark pool”), independent of the exchange, with a total size of 1.3 billion dollars. This transaction shows a large amount of Bitcoin changing hands without having a direct impact on the market price.
These types of transactions are generally preferred by large investors who want to reduce their positions without shaking the market. The sales in question, combined with the weak premiums seen in the stock markets, were interpreted as a sign that the professional investor was silently selling to avoid risk.
Critical support for investors was formed at $ 75,400. While this level stands out as the first important URPD (Unspent Realized Price Distribution) support wall, holding the price above it is important for the stability of the process. If this level is broken permanently, it was evaluated that there may be a new decline for BTC up to the $ 70,500 band in a short time.
Mini dictionary: URPD (Unspent Realized Price Distribution) provides data on how much Bitcoin changed hands in which price ranges in the market and at what levels the remaining balances from these transactions are kept. Critical support/resistance areas can be identified with this analysis.
| Indicator | Value/Level | News Context |
|---|---|---|
| Coinbase Premium | -0.136 | Low interest in US corporates |
| Korea Premium | -2.1 | Weak demand from Korean investors |
| STH MVRV | below 1 | Short-term investors are still at a loss |
| Dark Pool Sale | $1.3 billion | Corporate sales pressure |
| Critical Support (URPD) | $75,400 | If there is a breakout, $70,500 could be the target |
