Pause at The Crypto Bears Feast

Bears represent the bearish and bulls represent the bullish. The explanation can be as simple as that bears attack by clawing downwards and bulls goring upwards. It doesn’t have much mystery, but it is interesting.

What is clear is that both need pauses. Now we see a pause for bears. They have been feasting for the past few months. Why do we know this? Because it looks like the bulls are starting to defend key support above $30,000 USD in Bitcoin and above $1.5 billion in the market as a whole (chart attached).

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We see a possible Elliot wave structure, with the start in 2019, pullback in 2020 and the subsequent impulse in 2020-2021. In 2022-2023 we may see a final impulse, wave 5 typical of this type of structure. At the moment summer lows are respected (possible invalidation point) and we need to see more confirmations, but yesterday’s candle in the global market leads us to think of a possible significant trend change.

Volume has been very low in these recent declines. In September it was much stronger (comparing bearish moments) and in May the same, bearish strength. The bulls were stronger throughout the bullish period if we take volume zones. Up or down, we need to see much larger volume to know. Next challenge: resistances marked in blue.

On social media, the idea of “money is coming out of the exchanges” has become popular. It tells part of the truth, however it is multi-component analytics that can give very satisfactory results. In this case we have a dying bull bounce that clearly marks the point at which those who had not spent their BTC for 1-2 years are exiting. Using Glassnode data:

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The detail that the reader should bear in mind is the following: many countries offer tax advantages to holders who accumulate for more than a year, particularly in the United States. When they saw a 70% drop they rushed to sell, making very juicy profits with their purchases from clearly lower points.

We will keep a close eye on this metric because it would confirm that the cycle is over and the bulls will be the ones to feast. We must always respect the other animal from time to time.

We follow up on the activated directions indicator. We see that, indeed, the dip is clearly being bought. But it also seems that we are out of nachos and that a new dip may help to resume the rhythm of spreading and eating. We use data from Santiment:

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We also share the Bitcoin BTC data in the exchanges. Something curious is the fact that BTC started to be brought back to the exchanges after the falls started. So we could expect something similar to happen after that inflection point, when they start moving their BTC to the exchanges. At the moment little more to add, it is very clear.

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