Investors in the crypto market are currently bored to the point of uncertainty. Since the sharp correction in May, the Bitcoin price has been in a sideways movement for almost two months. It almost seems like BTC / USD is moving a bit disoriented without a clear price target. But is this really so? And has Bitcoin long been in a bear market? Or are the cops just taking a deep breath for the next attack on new records?
This speaks for the bear market
The bears currently have a couple of good arguments in hand as to why Bitcoin prices could run even further sideways or even stronger corrections are imminent.
Of course, the most obvious indication of a bear market could be the Bitcoin price. After the record of 65,000 dollars in May, BTC / USD is more than 50 percent corrected and has not yet managed to make a real turnaround. Although Bitcoin is currently trading at more than 35.000 dollars clearly above the lows at 28.800 dollars, but a price explosion is not yet recognizable.
BTC Under major Resistance
Above the Bitcoin price, massive resistance is in the region of $ 40,000. As long as these are not overcome, the trend remains bearish, at least on the larger timeframe. BTC / USD is also still below the EMA ribbons on the daily candles. These bands describe the moving average prices of the past 50, 100, 200 days. Also, the important support of the 21 Week EMA in past bull markets has not been able to cross BTC/USD again so far. It currently stands at around $ 41,000.
The current mood in the market is clearly bearish. Many investors currently seem to have little interest in buying Bitcoin, although prices are as low as they were at the beginning of the year.
This can be seen, for example, in the Bitcoin trading volume. The market analysis by Glassnode shows that the inflow volume on crypto exchanges such as Binance, Kraken or Coinbase has fallen by more than 28 percent in the past 24 hours alone. Of course, it must be taken into account here that the volumes on weekends are basically lower than on working days. However, the trend for the past seven trading days also shows a clear downward trend.
Since there is currently less trading overall, the outflow volume from the exchanges is decreasing at the same time. Within 24 hours, the outflow volume has fallen by more than 55 percent and the 7-day trend is also clearly declining. This is not surprising, because many investors have either sold their Bitcoins long after the correction in May or they keep their holdings on a hardware wallet such as Ledger.
This step is also basically understandable in a bear market. On hardware wallets, investors can keep their crypto holdings safe. The exchange exchanges also advertise with high security standards, but in the past there were always reports of hacker attacks on individual exchanges or about managers of crypto exchanges who wanted to get away with their customers ‘ stocks. However, one should not generalize here. Kryptoszene.de explains which exchanges are recommended.
Tradingview’s indicators also confirm the currently low level of trading interest. The daily volume has clearly declined in the past 2 weeks. Very strong trading volume was last seen on May 19, 2021 when Bitcoin fell to lows of $ 30,000 in its strong correction. Many investors have quickly sold their bitcoins here.
Fewer New BTC addresses, falling Exchange Fees
Also declining, according to Glassnode, are currently the number of new addresses that own Bitcoin, the number of transactions and the trading fees of the exchange platforms. Again, these are all bearish signs. So, the trading platforms are currently trying to attract investors to trading Bitcoin through low fees. But currently, the caution in the market seems to be too great to really succeed in changing the trend here.
Other factors, such as the general interest in Bitcoin on the Internet, speak in favor of an overall bearish market sentiment. For example, the statistics of the search engine Google show that the term “buy Bitcoin” is currently as little searched as last in November 2020. The index value here is currently 18 out of 100. At the beginning of January 2021, however, the value was still at the very top at 100 out of 100.
Even a look at social media metrics shows the waning interest in Bitcoin. For example, the statistics on YouTube show that the views of well-known crypto influencers are declining. The well-known YouTuber MMCrypto even admits this in his current video. However, from his point of view, this is more of an indication of potentially rising Bitcoin prices.
He can’t be wrong. Experience has shown that the corrections on the crypto market are always strongest when the FoMO (Fear of missing out), the danger of missing out, is greatest. Then if everyone wants to buy Bitcoin, and even those who have not yet dealt with the purchase of cryptocurrencies, perhaps it is not necessarily the best time to do it.
This speaks in favor of a continuation of the bull market
Many good arguments lie on the side of the bears. But there are also a few signals that could indicate that the bull market is not over yet.
Looking at the Bitcoin price trend around the all-time high of $ 65,000 and the subsequent correction, this is significantly different from past bull markets. Each cycle has ended with a steep price spike and then a sharp downtrend. This time the market top is round shaped and looks more like a crown.
Many bullish market analyses for this cycle have also been far from achieved. Thus, a frequently mentioned price target for the end of 2021 is the mark of 100,000 dollars. The well-known analyst Plan B describes this level in his stock-to-flow model as the minimum target for the Bitcoin price. Other analysts and Bitcoin influencers also trust the Bitcoin to easily six-digit prices by the end of the year.
A much-quoted chart pattern by analyst legend Richard Wyckoff could also prove to be potentially bullish for the Bitcoin price. So far, BTC/USD is following its “Accumulation Schematic #1” quite accurately, which describes an explosive turnaround in prices after a strong correction. Kryptoszene.de already reported in detail about this possible scenario, after the Bitcoin price could soon rise sharply again.
The continuation of the bull market could be supported not least by fundamental developments in the financial markets, which have not changed significantly despite the recent correction. Fiat currencies such as the dollar remain in a weak position, as evidenced by the inflationary issuance of US dollars by the US government.
Cash has clearly lost value not only since the Corona crisis. A zero interest rate policy has led to investors prefer to buy stocks, invest in cryptocurrencies or buy real estate for their money rather than putting their savings in the bank without a return.