Why The Idea Is Not New In Crypto, Bitcoin, And Modern Digital Markets
Ever since MicroStrategy and hedge fund managers moved into the Bitcoin space in early 2020, rumors and “conspiracy theories” have circulated that the days of an independent, relatively free market were over. Price action, however, remained relatively predictable given Bitcoin’s general behavior. However, mid-2021 was full of surprises. After dropping from the new all-time high of approximately $65K, a narrative emerged that Bitcoin was likely to undergo a cycle similar to the one in 2013.
Bitcoin went on to do more than dip! Bitcoin dropped approximately 56% before finding a bottom. Let me remind you that the entire drop from peak to floor in the previous bear market of 2018/19 was 85%! Considering the recent local high, potential investors found the discount too good to pass up. A fresh round of accumulation began, and the Bitcoin price once again pushed higher.
BTC went on to form a new all-time high just below $70K before collapsing again. We have seen the price edge lower consistently and are currently observing $39K as I write. In a recent post published on the 18th of January, I outlined my view that if BTC were to break definitively below $38K, I would expect the targets of the current bear patterns to be reached.
However, if BTC were to break below $38K, it would be reasonable to assume that the above-mentioned patterns would likely proceed towards their specified targets.
One needs to be aware of the infamous “Bitcoin scam wick”, which will overextend significantly on a drop, only to bounce back into safer territory. For this reason, I would at least wait for a daily close below these levels.
A scam wick is commonly associated with liquidations and stop hunting. Prices move rapidly and temporarily in a particular direction before returning to the average daily trading range. This is why setting stop-loss orders is a very specific and calculated practice.
My Recent Observations Regarding The Bitcoin Price: Market Structure, Trends, And Key Signals
In the same article, I describe what I interpret as a well-designed accumulation zone between $38K and $45K, which has become so boring due to its predictability. I also stated that a sudden surge in volume could shatter this zone with an aggressive move in either direction.
The most logical outcome here is an extended period of flat price action, most likely in the $38K to $ 45K range. Significant volume could always still come in and ultimately destroy what appears to be a carefully constructed accumulation zone. This could take place in favor of the bears, as well as the bulls; it all depends on what that volume is doing.
It should also be considered that the extension of this zone is a likely scenario. The goal is to create an opportunity to buy even lower, effectively extending the zone without breaking it. There have been a couple of brief dips to current levels, and you have to admit that buying at $38K is a great deal. Even in the short term, a 10% gain can be secured in days.
Organic Or Strategic Market Move? Understanding Bitcoin And Crypto Price Action
Is this a surprise move of volume or another very well-constructed move? Answering this question could reveal how far the manipulation goes. If greed has encouraged large players to expand their zones, then at least there is some comfort. The reason is that accumulating at low levels doesn’t help much if the whole price structure collapses. However, exchange volume is very low, but that doesn’t mean much, as OTC is often the preferred method.
Manipulating the spot price with volume to buy on an OTC, where the price is not affected, is a logically “smart move”. There are so many ways that markets are perverted daily that it is probably better that market participants are, for the most part, ignorant of this truth. It may very well deter many if they knew the extent to which this actually occurs daily.
The Skill Most Crypto Investors Ignore: Patience & Restraint
Jumping on any bandwagon at this point, based on a potential scenario or narrative that may very well be playing out, is not something I am doing. For the moment, I am watching and gathering points of data and intel. Everyone is at a different point in their crypto journey, so risk tolerance varies. Every investor needs to assess their own unique risk tolerance. As my disclaimer states, I am not your financial advisor. I merely share my thoughts, experiences, and insights into the market.
Extreme Fear Persists
Since we have now printed a new all-time high for Bitcoin at just below $70K, the market is already in significant pain. The Crypto Fear & Greed index continues to reflect “Extreme Fear”, which has been the case for the past three weeks. Certain alts are suffering tremendously, while others are holding up much better. This is what we need to see more of if we truly want to establish this market.
Is The Manipulation Real?
There is always the chance that this is all fairly organic. It is possible, but to be honest, I doubt it. There are a few rather concerning points that, however, suggest some level of manipulation. The continued accumulation of whale wallets at these levels also suggests they don’t expect prices to collapse entirely. We need to determine how far and how long this will go on.
Conclusion
Having someone tell you what to do is never a good idea. Investors need to be active in this market to make independent decisions. Crypto was, in essence, meant to remove custodial services, which would also imply broker services, where a well-dressed individual tells you what to do. Crypto puts the power back into your hands, along with the responsibility.
Wishing you well as you continue on your crypto journey, remembering that all journeys include both sunshine and rain. There are benefits and opportunities for each. Don’t get so burdened by price action that you become unresponsive to the opportunities around you. See you soon!
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