If there is one defining characteristic of the cryptoasset market, it is the higher volatility than other markets. This is something that all investors have already experienced regardless of the scenario. Whether in bearish or bullish movements, the fact is that the price movement is capable of providing long and fast rallies.
This is still a characteristic of the market that can have its origin in different causes, but we could say that it is not by itself negative. As all the things that can happen to us when making our investments, it is something that we have to manage, and success will depend on how successful we are in carrying out this task.
This has allowed us to have a rapid rise in the price level of the market, but every rise has its distribution, and it is convenient that it has it.
Bitcoin distribution movement
To illustrate this concept, let’s look at the market’s benchmark asset: bitcoin. As the first cryptocurrency, and the most capitalized, it has a direct influence on the rest more than known
We can clearly see how the price has found a strong resistance zone at the level of 45,000 USD. This level represents a revaluation of about 30% over the lows marked in this downward movement that is marking the beginning of 2022.
There is a strong resistance area at the $45,000 level
It should be noted that this distribution movement has a very specific technical structure that leads us to think that we could possibly be facing something more than a simple distribution. We must carefully follow this movement that marks a double maximum downward, a pattern indicative of a possible change of trend in a short term.
I believe that this would clearly indicate that the current upward movement of the price is going to encounter more difficulties than expected and that therefore, it is going to be delayed for a longer period of time.
ETH has still not reached the downward trend line.
Regarding the other major market player, we are still not consolidating a trend reversal in the image of BTC. The last bearish guideline has not yet been pierced, adding a factor of uncertainty.
Undoubtedly, news of great impact and totally unrelated to the markets are only amplifying market movements. This has been especially noticeable in Ethereum and has accentuated the downward movement leaving an even worse structure from a technical point of view.
This pushes us to an more optimistic scenario in which the maximum aspiration at this time would be the development of a sideways channel that allows us to recompose the demand.
Great possibility of searching for support zones
All this scenario gives us a great possibility that the market as a whole will look for support zones.
A market that has shown two sides of the same coin in the weekly period. The DEFI market has developed a first bullish phase of recovery that has had a sudden and abrupt end with a correction process that has led it to enter into losses in this period.
In parallel, the blocked capital or TVL has remained relatively stable with a slight downward trend.
Increased trading in whale accounts
All this market movement has been reflected in an increase in the activity of large traders in the last weekly period.
A noteworthy fact is that the week has been marked by the entry of Bitcoin in exchange accounts, which would indicate an increase in sales operations that we have seen reflected in the prices as mentioned above.
Diagnosis: slight recovery but needs improvement
The state of the market is one of slight recovery and change of bias, but this last movement still indicates a certain weakness in the market. Although we can see that we are still in a downtrend as a market, our PCTATH indicator shows a certain modification of that bias, but it has encountered an important resistance zone at 60 points. This is a test that the market has already performed on multiple occasions and has been shown as an area of market rejection.
We will have to be attentive to market movements in this area, because the most likely scenario in these zone could be a significant upward movement to overcome this resistance zone and consolidate higher areas of the market.
Undoubtedly, to reach this point it is absolutely necessary the appearance of new players and investors in the market to generate a significant increase in demand. Pay attention to the bullish news that we may see soon, because we may have news in the coming days.
Uncertainty or bad geopolitical news can change this scenario described suddenly