Bitcoin falls for the first time in history for seven weeks in a row. What will happen to cryptocurrencies next?
On the scale of the weekly Bitcoin chart , the seventh red candle in a row closed. That is, by the end of the week, the cost of the main cryptocurrency was lower seven times in a row than at its beginning. This is a new “record” for Bitcoin, which, among other things, fell below $30,000 the day before. Unfortunately, many experts agree that this does not bring anything good for those who are counting on a BTC rebound in the near future. Let's talk about what's happening in more detail.
Note that despite the collapse of the cryptocurrency market, there are no fewer people who want to contact Bitcoin. In particular, the number of addresses holding more than 0.01 BTC exceeds the 10 million mark. This means that people are ready to invest their own money in a coin and probably believe in its serious prospects.
What will happen to the Bitcoin price?
According to CryptoSlate sources , BTC has been falling for weeks before, however, there were still moments of “breathing” in previous downtrends when the cryptocurrency grew slightly. Accordingly, in a number of red candles on the 1-week chart there were green ones.
Recall that for the candle to be red, the asset must be lower in price by the end of its period - in this case, one week - than at its beginning. We wrote more about the features of Japanese candlesticks and their use in trading in this material.
Bitcoin needed to close above $33,928 to avoid a seventh consecutive weekly red candle. Although there has been a rise in the price of the cryptocurrency by about 22 percent since reaching the local bottom at $25,406, Bitcoin ended the week several thousand dollars below its target. Many experts believe that this decline indicates that we are now officially in a global bearish trend .
A crypto enthusiast and trader under the nickname Rekt Capital commented on the anti-record on his Twitter as follows. Here is his retort.
Lots of buzz around the 7th consecutive red candle on the 1-week Bitcoin chart. After all, this is the first time in history that this has happened. The most in the history of BTC has been five consecutive red weekly candles. None of them marked a global bottom on the chart. They, in fact, preceded a further decline in the price of Bitcoin.
See also: The billionaire who invested half of his investments in Bitcoin is not afraid of the fall of the cryptocurrency. And that's why.
Meanwhile, the volume of long positions or the so-called longs in Bitcoin trading on the Bitfinex crypto exchange increased by 60 percent in a day. Recall that the previous historical maximum of this indicator was set in July 2021. A long position is the purchase of an asset by a trader with leverage, that is, with funds borrowed from the exchange against the security of all or part of his balance.
Last time, the rapid growth in longs was accompanied by a local bottom on the Bitcoin chart, that is, the activity of investors allowed the cryptocurrency to move to the growth stage.
Something interesting is also happening in the dynamics of short positions or shorts. During the sharp fall in the price of BTC last week, their volumes rose rapidly, but then fell again. In other words, a significant part of the market players earned on the fall of the main cryptocurrency, but later closed their short positions.
Bitfinex CTO Paolo Ardoino noted that the above indicators indicate the beginning of the accumulation of BTC by large bidders, that is, the so-called "whales". Here is a quote in which an expert shares his vision of what is happening. The replica is led by CryptoSlate .
Some whales greatly increase their existing longs. Keep in mind that they may be hedging themselves elsewhere, so all of this is not necessarily indicative of a cryptocurrency going up soon.
That is, Ardoino emphasizes that long positions in the futures markets are often offset by selling BTC in the spot market. This strategy can provide an opportunity to hedge against further market volatility depending on how the trader places his limit orders in the futures contract.
We believe that the digital asset industry is really not in the best condition right now. The reason for the collapse of the market, among other things, was the activity of the Luna Foundation Guard fund, which tried to revive the stablecoin by actively buying it. However, in essence, what is happening may not lead to a protracted bear market: after all, the cryptocurrency industry has developed significantly since 2018 and now helps many investors on a daily basis. This means that it will not be so easy to lose interest in your coins - at least the events of recent days hint at this.
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