According to market analyst Scott Melker, there is no point in analyzing bitcoin’s price action right now. He says this in his latest newsletter on the cryptocurrency market, published this Thursday. “Bitcoin price continues to sideline and trading volume remains low,” Melker noted.
Indeed, the price of bitcoin has remained in a narrow range between $28,700 and $31,200 for the past two weeks, while daily traded volumes have not exceeded USD 50,000 BTC in the same periodaccording to bitcoinity.org. When examining the monthly volume of bitcoin, a decreasing trend is observed. In mid-2021, monthly volumes exceeded $60 billion, while in the last three months, monthly volume has remained below $30 billion
Melker’s view on the relative stability of the markets, with no clear signs of a possible breakout to the upside or downside, coincides with the position taken by the famous analyst Willy Woo; who announced last March that he would discontinue his newsletter on the bitcoin market, as reported by CriptoNoticias.
Woo expressed on that occasion that he would interrupt his analysis of the bitcoin market, as it became increasingly difficult to predict future price action. At the time, in the second week of March, when the bitcoin price was hovering around $38,000, Woo predicted a deeper bearish phase to come.
counter bitcoin trading strategy
Merkel also proposes a survey of investors, aimed at calibrating the temperature of the market. Among the topics in the survey, she polls opinion on whether traders are profiting or losing, whether hodlers are calm or panicked, whether interest rates are high or low, and other aspects of the macroeconomic environment. “Does the Fed resemble a dove or rather a hawk?” is one of the questions she highlights in this edition of the newsletter.
If the majority of the answers coincide with the first alternative presented in each case, Melker says it’s time to put a lock on his wallet, put everything in a safe, and then bury it. Otherwise, if most of the answers correspond mostly to the second alternative, Melker advises looking for some available funds and start investing. Personally, he confesses that his answers are on the side of the second alternative.
It is a strategy that goes against the current. “Ideally we sell (slowly) when the responses match the first alternative, and we buy (slowly) when the responses mostly match the second alternative.” The problem with this strategy, Melker points out, is that we are human. “Our psyche tells us to do the opposite, so we have to fight our instincts.”
If the market was a rapper, it would be Ice-T, Ice Cube, or maybe Vanilla Ice. It’s frosty. Arctic.
Scott Melker, analyst.
Melker emphasizes that the strategy indicated is for those who want to go against logic and buy when assets are down. “It’s not for everyone,” she warns.
In a short term, the relative stability of the price can lead to upward or downward trends, without clear previous signs. The recent liquidations of bitcoin and other cryptocurrencies of more than USD 340 million bolívares, reported by CriptoNoticias, predominantly affected traders with short positions.
This Thursday, however, the liquidations of more than USD 427 million in the last 24 hours came mostly from long positions, according to to data from Coinglass. As can be seen, there is no clear winner in this phase of the bitcoin cycle. everyone can lose money.
Even with the downward trend that continues, in the midst of the ninth consecutive week of red numbers, one of the main investment banks in the United States, JPMorgan, opined that bitcoin was 30% below its “fair price”, a fact that we reported in this medium. Bitcoin should now be at $38,000, as noted by JPMorgan.