Bitcoin has ended consecutive weeks within the crimson for the previous two months. Final week, it had closed its seventh straight weekly candle for the primary time in historical past, and whereas traders hoped this may finish in a reversal, the digital asset has marked one other week within the crimson. This marks the primary time Bitcoin has recorded eight consecutive weekly closes, prompting main panic amongst crypto traders.
Eight weeks crimson not unhealthy?
Often, a serious digital asset like Bitcoin being down for a number of weeks signifies an enormous bear market is on the horizon. Now it may be assumed that the crypto market has efficiently entered the bear market. This has been the rationale for the low and unfavourable momentum of traders over the previous few months. However since Bitcoin has been within the crimson for thus many weeks, issues are anticipated to get even worse.
Associated Studying | Lengthy liquidations proceed to shake the market as Bitcoin struggles to settle above $30,000
One factor that was constant as Bitcoin ended a number of weeks within the crimson was the downtrend that often adopted the market. Whereas some see this as a interval of accumulation, in the long run the large sell-offs sparked by these crimson closures merely triumphed. These kind of consecutive unfavourable weekly closes have develop into referred to as an inevitable a part of a bear market.
BTC marks eight consecutive crimson closes | Supply: BTCUSD on TradingView.com
Nonetheless, the market has by no means seen something prefer it. It could be pure to wish to use historic context when one thing alarming occurs, however and not using a reference level there is no such thing as a method of telling the place the market would possibly go from right here.
Bitcoin for a bear?
Whereas there is no such thing as a historic context to match present market circumstances to, the other has occurred earlier than. Final 12 months, Bitcoin had seen inexperienced closes for eight consecutive weeks. What adopted have been a number of bull rallies that finally noticed the value of the digital asset hit its all-time excessive of $69,000.
If this have been taken and in comparison with present market circumstances, the digital asset with the eight consecutive crimson closures is prone to expertise a number of dips and crashes that can doubtless ship it again into $20,000 territory. So it is rather doubtless that the underside of the market just isn’t so far as many wish to consider.
Associated Studying | MicroStrategy Will Not Promote Any of Its Bitcoins, CFO Reveals
Nonetheless, there are indicators that recommend in any other case, reminiscent of: B. Bitcoin buying and selling above its 5-day shifting common. Nonetheless, that is solely an excellent indicator within the short-term as longer-term indicators stay bearish.
Retail traders are additionally accelerating the tempo with regards to BTC accumulation. The variety of Bitcoin wallets with greater than 1 BTC of their stability just lately hit a brand new excessive and now stands at 844,906. Whereas this means constructive sentiment amongst these traders, by and huge these smaller traders maintain too little to truly transfer the market. So if a rebound is to materialize, the digital asset would want some motion from bigger holders.
Featured picture from Unsplash, chart from TradingView.com
Comply with Greatest Owie on Twitter for market insights, updates and the occasional humorous tweet…