- Bitcoin saw a positive reaction on the price charts, but social metrics underlined the weakness.
- High demand for Bitcoin in May could quickly push prices past the ATH.
Bitcoin [BTC] had an interesting week in terms of price action. It had a lively break past the local range high of $67k on May 20.
On May 23 and 24, Bitcoin retested the $66.3k-$66.6k zone as support and bounced higher to trade at $69.1k at the time of writing.
More gains are likely to follow as demand for the king of crypto continues to grow.
The CEO of blockchain-based payment app Strike, Jack Mallers, claimed in a conversation with Antony Pompliano that “Bitcoin is the best thing you can own.”
The social statistics and activity in the chain weakened
The social volume behind Bitcoin has slowly declined since March 11. Weighted sentiment was negative throughout May, with two positive increases since mid-May.
Together they pointed to reduced engagement on social media.
Daily activity has also trended lower since mid-March. On the other hand, dormant circulation last experienced noticeably large peaks on April 18 and May 15.
However, their size could not match that of March or late February.
This showed that dormant Bitcoin’s on-chain movement had been absent recently, suggesting that a major sell-off was not yet underway. This was a good sign as it underlines the lower selling pressure.
Is Bitcoin Demand Greater Than Ever Before?
In a message on X (formerly Twitter) crypto analyst Axel Adler showed that the demand was red hot. This conclusion was drawn based on the entity-adjusted number of transactions.
Based on the chart data, demand was close to the level of the 2016 rally.
Read Bitcoin’s [BTC] price forecast 2024-25
He added that the price of Bitcoin at the time was $300, compared to $69.1k today. The capital involved is therefore much larger than eight years ago.
This demand from retail and institutional investors, combined with reduced selling pressure from the dormant circulation metric, indicated that Bitcoin is very likely to break past the $71.4k region again.