Signals change in the market

The beginning of the change?

This week we finally have relevant news to contribute. Today we cannot guarantee anything, but it is also true that we can appreciate certain significant changes in the market.

As always, the maximum exponent is Bitcoin. A Bitcoin that has reacted quite forcefully to the falls at the beginning of the week, and that has confirmed this important bottom area in the area of 31,000-32,000 USD

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From those support levels, Bitcoin has started to build a market turnaround structure yet to be confirmed. Currently, the critical area of the chart is located in the range of 35,000-37,000 USD, which clearly marks the border in terms of a change in sentiment.

  • Above that level we would have a bearish guideline perforation scenario and consolidation of these levels as support. Waiting for a confirmation pull-back figure we could have a clear trend reversal here
  • Below this level we would find ourselves in a neutral or range scenario, always above USD 31,000, where the bearish guideline would play an important role
  • Below 31,000 USD we would have a clearly bearish scenario that would leave the current movement as something merely technical and would directly threaten the 30,000 USD zone, a very important and psychological point.

Ethereum lags behind

While the scenario for Bitcoin is bullish so far, with a technical move supported by a strong surge in volume, which had been absent from the market for weeks, the same cannot be said for Ethereum.

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Ethereum right now is not in a position to pierce the bearish guideline, which is much further away from the price. The derivatives market data also indicates a bias of some caution in the market with Put/Call ratios for both assets (BTC and ETH) on the rise

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Bitcoin regains market dominance

Another significant fact that we can see is that in this downward movement the preponderance of Bitcoin and the role of market leader that investors grant it have been revealed again.

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In this sense, the dominance graphs are very explicit when it comes to highlighting this movement, with a bitcoin at levels well above the 40% in which it was located.

All these data lead us to think that the big ones affected by the situation are the altcoins, undoubtedly because they do not have a reaction capacity as strong as that of Bitcoin.

Bitcoin falls, like altcoins and the rest of the market, but its recovery speed is much higher

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But that impact on altcoins, on DeFi protocols, can not only be seen in the price of each of their tokens, but also in the capital locked or TVL

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Locked capital is a very interesting metric that also gives us a lot of information about market sentiment. It will be very useful to identify the moment in which the trend of withdrawing capital from the market is reversed, and therefore, a fact that we must follow closely these days

Whales activity

This week’s rebound movement has also been accompanied by large transactions, a positive fact, although some have been to liquidate positions

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In this graph we can see how there has been a significant extraction of capital from exchanges, largely in the form of stablecoinThis stable capital has not been used subsequently to make purchases, so it is waiting for a clear upward bias in the market.

Despite this, confidence in Bitcoin has not been diminished, on the contrary, and in this sense, we could interpret that it is clearly taking on a role as an active haven in the crypto universe.

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The accumulations of Bitcoin have continued in this operator profile (operations > 10 million USD) and have occurred in parallel to the timid reaction that we have seen in the market, a trend that has been a constant.

Shy sign of improvement

In conclusion, we could say that we appreciate some improvement in the market that today we could only describe as a technical rebound, but we have seen movements that had not occurred for a long time and that suggest the inflow of bullish capital.

We have to wait and see if we can confirm the rebound, seeing if it is capable of transforming into a change in trend by piercing the resistance zones.

To close, the volatility of the market would be indicating to us at this moment that we are in an oversold zone, so this would also contribute to the idea of being at a turning point in the market.

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Financial markets are not an mathematical science. The only thing we can do is design scenarios and suspect each one of them happening, and in this sense, we believe that the balance timidly leans towards the bullish side.