Bitcoin – What’s Happening In The Charts?

Volatility Returns

It’s been a bit quiet of late, in regard to Bitcoin and the Crypto market as a whole. However, we have experienced a modest pump during the course of the past 24 hours. Once again, the anticipation of a FED pivot is behind this move. It seems unlikely, but you never know. These are not only unprecedented times but strange times. This has caused me to consider an alternative trading strategy which I will get into in another post. However, let’s have a look at the charts, and see what has taken place since my last update.

As pictured in the chart above, BTC was finding it difficult to break outside of this pattern formation. It has taken almost two weeks, but it appears as if we now have a breakout. As I mentioned in my previous update, I would not get too happy, even in the event of a breakout.

However, a break to the upside would likely be a fake-out. A potential “final flush” makes a lot of sense from so many angles.

Let’s address why another dump is still very much an option. Firstly, much of this pump is based on an outcome that is still to occur. Furthermore, it is rather hopeful at best. A negative outcome could see the market sell-off even “harder” than it pumped.

What is even more concerning is the current behavior of the whales. As mentioned previously, whales need to begin accumulation prior to the bottom.

They require tremendous amounts of liquidity. This ultimately forces them to begin accumulation prior to a bottom. In other words, in a perfect execution of strategy, they will begin accumulating a month or two prior to a perceived bottom. If whales wait for a bottom, their purchasing will simply push the price higher and eliminate their gains. Whales need to buy into falling prices, in order to establish a good entry.

I want to place emphasis on “prior to the bottom”. Whale wallets have subsequently been decreasing as the Bitcoin price has moved higher. This means that the whales are still utilizing pumps as “exit liquidity”. Furthermore, this also means that if they are selling now, then they are aiming to buy lower.

Volume

Once again, the volume (pink line) is extremely unimpressive. In actual fact, it’s the lowest volume we have seen in months. However, this might not necessarily be a bad thing! Looking back to the volume in 2021 when BTC first crashed to $29K you will note that the volume was at its lowest, just prior to a fresh move to the upside. Even though this reduced volume could eventually point to a turning point, it is still however bearish, at least for now.

You will also note that I am objectively presenting data. Many arrive at a viewpoint by only choosing the data that matches their bias, a foolish move, to say the least. Ultimately, confluence will proceed to make the decision for you. Our opinions are inconsequential. what counts is the appropriate collection and processing of data.

Looking back to the onset of the previous bull market, the volume also played an important role. The yellow line reveals how the volume spiked alongside the appreciation of price. You might not catch the very beginning of a fresh move to the upside by paying attention to the volume, but you will be able to validate a fresh move to the upside.

There have been multiple moves to the upside that have ended up collapsing to lower levels. Just take a look at the graph above. Essentially, the volume will tell you when you can begin placing more confidence in an upward move. In summary, confluence still seems to be on the side of the bears.

• A FED pivot /slowdown is still unconfirmed
• Whales continue to sell into bullish price action
• Volume is insignificant

There are however additional indicators, but I have chosen to focus on the key indicators for the sake of time. I will say that there is a chance that we continue to see more from this pump, but looking at the data, I would expect it to taper off leading into the next FED announcement. A positive announcement is the only way that I see this rally continuing.

That’s it for now! See You next time!