Sit and wait game while the price of BTC (and other crypto assets) is climbing is over. Market under pressure, and many investors (especially beginners), don’t understand what's going on, and in what to believe - is it the start of another “crypto winter” or just a market correction?
We prepared this material to help you to understand the full picture of crypto prices movements and give you the in-depth analysis of volumes changing, big players behavior, so you will make your investment decision more correctly.
In this article you will know:
1. Why is the Cryptocurrency market down?
2. How to understand what are investors doing?
3. Who is selling?
4. Are the Long-term Holders buying or selling their crypto assets?
5. Will Bitcoin To Rise In the Short Term?
Why is the Cryptocurrency market down?
So, lets start of the beginning.) Only a couple of days after much anticipated Coinbase direct listing, on 19 May 2021, Bitcoin market experienced one of the most significant liquidity events and price draw-downs since Black Thursday in March 2020.
During the recent sell-off, the Bitcoin network experienced a reduction in active addresses, down 18% from the recent highs to around 0.94M. This fall indicating that activity has slowed.
From $64800 to $37000 USD per BTC - the price dropped by 48% from the last high. Thousands of investors around the world lost their money and nerves. And people who are interested in financial market dynamics (you are among them, if you’re reading this article) are perplexed - how is it possible that the words of only one person (even so famous and special as Elon Musk) does have such a huge and disruptive impact on the whole market?
However, if we would focus on the price technical behavior, the market correction is a necessary part of the price movement. Endless price rising (same as an endless falling) is impossible.
Bitcoin had been on a remarkable bull run. The cryptocurrency saw roughly 1500% gains from the $3,800 it was worth in March 2020 to its peak in April 2021. Correction returns the cryptocurrency price from an abnormal surge to its long-term established trend.
The primary question on investors' minds is whether a bear market trend is in play, or whether the market has returned to a re-accumulation range?
Top-level summary for 9th Jun 2021 (current price $34.147k):
Macro long term: In terms of where we sit in the full macro cycle, Bitcoin is still in a bull market. User growth continues to climb against a price dip, while price is clearly below fundamental valuations.
Medium term: The medium term picture (over the coming months) is of course a question of how quick will the recovery be. The market remains uncertain about bullish or bearish conditions govern, as on-chain activity and value settlement falls dramatically.
Short term: The short-term picture is neutral, siding on bullish. Down-side risk is limited as we’re in a region of being deeply oversold over fundamental price and technical structure shows the strong support levels.
Will Bitcoin To Rise In the Short Term?
One thing you need to understand: when it comes to large players and volumes, reversal levels are determined in the medium term. It means, you can’t just buy asset immediately after you’ve seen the raising volumes and expecting the huge growth from the current price. It doesn’t work like this. You need to be prepared for potential draw down of your position. This strategy is working only on long-term.
Let’s have a look at the potential reversal levels for the BTC price
Currently, the Bitcoin price is hovering around 50% below the all-time high at around $65,000. This level is supported by SMA(21) on the weekly timeframe. This is the first potential reverse level (Scenario 1).
However, if the price will breach this level (for the strong signal, on daily timeframe couple of the price candles should close lower than $29K), it would be the signal of potential reaching the next strong support near the $20-21’000 USD area (Scenario 2).
The price is moving into the range $29’000-40’000 USD per BTC during the last 20 days (since 19th of May). The $29’000-$31’000 area is a strong support area and gives an opportunity for buying BTC for the long-term investors from the current price.
But the potential long up-trend movement will be confirmed only if the price will breach the EMA(144) level (around $39600 USD). And investors who buy at the current price needs to be ready for the potential draw down about 35%, as the next support level is around $20’000 USD per BTC. It’s not a prediction, it’s just a warning.
Disclaimer:
All investment strategies and investments involve the risk of loss. Nothing contained in this article should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as a recommendation or as a guarantee of any specific outcome or profit.
If you like this article and want to get more, please, share it in your social media.
Thanks for your support!
Olga Prokhorova
We prepared this material to help you to understand the full picture of crypto prices movements and give you the in-depth analysis of volumes changing, big players behavior, so you will make your investment decision more correctly.
In this article you will know:
1. Why is the Cryptocurrency market down?
2. How to understand what are investors doing?
3. Who is selling?
4. Are the Long-term Holders buying or selling their crypto assets?
5. Will Bitcoin To Rise In the Short Term?
Why is the Cryptocurrency market down?
So, lets start of the beginning.) Only a couple of days after much anticipated Coinbase direct listing, on 19 May 2021, Bitcoin market experienced one of the most significant liquidity events and price draw-downs since Black Thursday in March 2020.
During the recent sell-off, the Bitcoin network experienced a reduction in active addresses, down 18% from the recent highs to around 0.94M. This fall indicating that activity has slowed.
From $64800 to $37000 USD per BTC - the price dropped by 48% from the last high. Thousands of investors around the world lost their money and nerves. And people who are interested in financial market dynamics (you are among them, if you’re reading this article) are perplexed - how is it possible that the words of only one person (even so famous and special as Elon Musk) does have such a huge and disruptive impact on the whole market?
However, if we would focus on the price technical behavior, the market correction is a necessary part of the price movement. Endless price rising (same as an endless falling) is impossible.
Bitcoin had been on a remarkable bull run. The cryptocurrency saw roughly 1500% gains from the $3,800 it was worth in March 2020 to its peak in April 2021. Correction returns the cryptocurrency price from an abnormal surge to its long-term established trend.
The primary question on investors' minds is whether a bear market trend is in play, or whether the market has returned to a re-accumulation range?
Top-level summary for 9th Jun 2021 (current price $34.147k):
Macro long term: In terms of where we sit in the full macro cycle, Bitcoin is still in a bull market. User growth continues to climb against a price dip, while price is clearly below fundamental valuations.
Medium term: The medium term picture (over the coming months) is of course a question of how quick will the recovery be. The market remains uncertain about bullish or bearish conditions govern, as on-chain activity and value settlement falls dramatically.
Short term: The short-term picture is neutral, siding on bullish. Down-side risk is limited as we’re in a region of being deeply oversold over fundamental price and technical structure shows the strong support levels.
Will Bitcoin To Rise In the Short Term?
One thing you need to understand: when it comes to large players and volumes, reversal levels are determined in the medium term. It means, you can’t just buy asset immediately after you’ve seen the raising volumes and expecting the huge growth from the current price. It doesn’t work like this. You need to be prepared for potential draw down of your position. This strategy is working only on long-term.
Let’s have a look at the potential reversal levels for the BTC price
Currently, the Bitcoin price is hovering around 50% below the all-time high at around $65,000. This level is supported by SMA(21) on the weekly timeframe. This is the first potential reverse level (Scenario 1).
However, if the price will breach this level (for the strong signal, on daily timeframe couple of the price candles should close lower than $29K), it would be the signal of potential reaching the next strong support near the $20-21’000 USD area (Scenario 2).
The price is moving into the range $29’000-40’000 USD per BTC during the last 20 days (since 19th of May). The $29’000-$31’000 area is a strong support area and gives an opportunity for buying BTC for the long-term investors from the current price.
But the potential long up-trend movement will be confirmed only if the price will breach the EMA(144) level (around $39600 USD). And investors who buy at the current price needs to be ready for the potential draw down about 35%, as the next support level is around $20’000 USD per BTC. It’s not a prediction, it’s just a warning.
Disclaimer:
All investment strategies and investments involve the risk of loss. Nothing contained in this article should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as a recommendation or as a guarantee of any specific outcome or profit.
If you like this article and want to get more, please, share it in your social media.
Thanks for your support!
Olga Prokhorova