Good day Hiveians!
Join me in analyzing the crypto markets!
The week started good with the entire crypto market recovering
But just like several months ago when there was still a possibility for a "3rd wave bull market", the market is squeezing traders pretty hard: just when one thinks an upward has been established, the market dives. This pattern is very evident. Let's have a look:
In June/July of last year there was a descending channel with several wicks breaking the trend by a large margin. These occurred especially often on the downside: with each of them a trader could have thought that the market is heading once again for a big macro correction. But prices pulled back up. This pattern lasted for nearly 3 months before establishing an upward trend. One could have lost a lot of money when trading this kind of pattern wrongly by buying the highs and selling the lows.
Then in February we saw the same thing, but this time it was a sideways moving channel. Again, big swings up and down with some wicks on either side. But again they were fake outs until the market decided to head lower in May. This period lasted also 3 months.
This time the pattern once more repeats but on a smaller scale. What this means is that price will move in this channel until an up or downtrend is confirmed.
So what will happen?
On the weekly chart it is easier to get a better overview of the situation. And that is currently historical: I don't think Bitcoin has ever had 9 red weekly candles before. And while it looked like we would end this one in green, it is only barely hanging on. In fact, we could easily fall below the threshold and end this week in red as well!
However, I think it is getting statistically increasingly more likely to have a green candle. The market simply does not constantly move in one direction. The chances for a small bear rally are quite high in my opinion. Since I have argued in my last post that Bitcoin is still going to be in a bear market for at least until the end of this year, I think there is an even better chance for that reversal to take place as all bear markets have green periods - it's just that on average the market is red.
If we look at past bear markets, we can see the pattern: after every major correction, we saw a green upward push (although weaker than the downward trend). But we never saw a constant downward push. Every bear market also always ended with a strong sell off and a fairly quick recovery.
I therefore think that the blue trend seen in the chart could be a rough indicator how things could unfold in the next months. Alternatively, we are heading straight down to about 20-22k!
As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!
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