Does this confirm a midterm trend? Does the 48k area form the springboard to a full retrace and prices above 63k?
Let’s look at the big picture. We’ve had big parabolic rallies with prices rising by factors between 5-11 in Q3-4/2017, Q1-2/2019 and Q4/2020-Q1-2021, with big volumes until they formed a new ATH . At the top, eased significantly. Traders shut their pockets as soon as they lost confidence in a further rise. Does anyone remember differential calculus? The top is near when the second derivative of the price curve becomes negative, and it is reached when the first derivative becomes negative too. The second derivative of the price rise of Jul-2021 was negative, in no way parabolic. The first derivative is negative with two weeks candles now.
At the transition from a long-term ATH to a major correction, something happens that may well be called the “slow death.” Trading bottoms out, as fewer traders believe in a further significant rise in price. All professional traders (with appropriate trading experience and good analytics tools) have long since taken profits at this time on those parts of their investments that are not destined for HODL anyway (= large trading volumes when ATH comes in). And we haven’t traded at lower weekly volumes than those of the last four weeks since … Oct-2019 – remember this “surprise”?
In a “slow death”, price paints small “horns” at the chart on the basis of minimal volumes – fakeout rises, bull traps. These turn into panic selling, long squeezes and sharp price slides when brave bulls realize that the market is not willing to follow.
This is exactly the position we are currently in.
What do you think?
Of course, this is not a trading advice, just my private analysis as well as a text for entertainment purposes.
Never put your heart and your money in the same place.
You could end up with your balance getting f***** while you’re doing the hard work.
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