Are we in a bear market? 🐻🐻
Panic is rife:
Traditional markets are falling, we have one of the first large scale European wars in centuries and the fear and disruption of Covid is still evident. The combination of the above has created some serious headwinds for crypto, but are we in a bear market and will be see -99% losses like we did back in 2018?
We need to look to BTC for answers as it drives and, for the near future, always will drive crypto.
There are 2 core elements we must look at:
- Trend
- Momentum
The trend, as we can see from my yellow trendline, is a steady uptrend. This is key to keep an eye on.
Momentum is weak and the MACD acts as a good indicator for this, we can see it is to the upside and slowly trending higher (you can see this better if you zoom in).
Technically BTC is actually not looking bad at all and only looks bleak when you get lost in the noise of lower timeframes. However, we do need to watch this space as we are on the lower end of these trends and sentiment could change quickly if we break down.
On another note, exchange balances have begun to drop and have almost 62% of 1+ year old BTC addresses. If we hit 64% this is the highest in history.
Why is this important: The older the coins are the least likely to be spent, therefore, if we have the highest ever recorded number of old coins then we are at a point in history where we have one of the lowest sell side pressures from older hands. This is also a an indicator of what smart money is doing, which is the trend we want to follow.
Traditional markets are falling, we have one of the first large scale European wars in centuries and the fear and disruption of Covid is still evident. The combination of the above has created some serious headwinds for crypto, but are we in a bear market and will be see -99% losses like we did back in 2018?
We need to look to BTC for answers as it drives and, for the near future, always will drive crypto.
There are 2 core elements we must look at:
- Trend
- Momentum
The trend, as we can see from my yellow trendline, is a steady uptrend. This is key to keep an eye on.
Momentum is weak and the MACD acts as a good indicator for this, we can see it is to the upside and slowly trending higher (you can see this better if you zoom in).
Technically BTC is actually not looking bad at all and only looks bleak when you get lost in the noise of lower timeframes. However, we do need to watch this space as we are on the lower end of these trends and sentiment could change quickly if we break down.
On another note, exchange balances have begun to drop and have almost 62% of 1+ year old BTC addresses. If we hit 64% this is the highest in history.
Why is this important: The older the coins are the least likely to be spent, therefore, if we have the highest ever recorded number of old coins then we are at a point in history where we have one of the lowest sell side pressures from older hands. This is also a an indicator of what smart money is doing, which is the trend we want to follow.
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