Bitcoin (BTC) is playing a very dangerous game. It is hard to say if these are whales looking to lowball that have allowed the price to fall to such dangerous levels or if it is institutional players dumping Bitcoin (BTC) after every pump to take quick profits. The fact remains that Bitcoin (BTC) is currently walking the razorâs edge. Before descending to such levels, Bitcoin (BTC) had a chance to break the downtrend if the bulls had pushed enough. The above daily chart for BTC/USD shows that Bitcoin (BTC) already touched the trend line once in mid September and should have continued higher from there to break the downtrend instead of falling back towards the trend line.
The price of Bitcoin (BTC) is now further along the falling wedge and the triangle. Certainly, it would be easier now for Bitcoin (BTC) to break the downtrend resistance from these levels compared to before, but the difference is very minute. We have seen Bitcoin (BTC) bears giving up on exchanges like Bitmex and Bifinex. However, the bulls have done the same thing. To let the price slide back to the trend line after having touched it once is very dangerous. It is hard to tell what is really at play here. This could be an attempt to deliberately keep the price down or there might be an actual lack of interest. However, Bitcoin (BTC) will have to choose a direction by the end of the month.
There is still a high probability that Bitcoin (BTC) might break the downtrend in the days to come. However, now there is an equally strong probability that it may not considering the price has retraced back to the trend line having tested it once. Volume for BTC/USD has been on a constant decline and has now reached critical levels. This means that a strong swing either way could push Bitcoin (BTC) into another direction for a very long time. If that push is to the upside, Bitcoin (BTC) will see the beginning of a new cycle and the overall market cap will continue to rise as expected after completion of an extended correction. However, if that swing is to the downside, Bitcoin (BTC) will see another correction which will last at least for another four to six months.
Chart for Brave New Coin Liquid Index For Bitcoin (1M)
It may not be possible to tell what is really going on at this point unless you are a market maker or a whale. The game is still in the hands of early players in this space. To think that Wall Street or other traditional institutional investors have the muscle to suppress the price at this point would be unreasonable. Majority of Bitcoin (BTC) is still owned by miners, exchanges, early investors etc. There are different interest groups that look after their own interests. There are telegram groups for this where for instance a group of whales decide when to pump or when to dump. This is not surprising at all in an unregulated market and we will continue to see these things for quite some time. However, the point is that sometimes the interests of these groups align and that is when we see a major rise in price.
Currently, the miners want the price to go up as they cannot turn a profit at such prices. The exchanges are happy with the current scenario is there is a lot of panic selling and fomo buying going on. They are happy to print such patterns for traders that induce such behavior. In addition to that, there is a lot of leveraged trading going on. However, the volume is low and very soon they might want to see a price reversal so more people can get in the game. In short, their interest is ready to turn towards the bullish side. The same goes for whales that have been buying the dips and selling the tops, not to make more dollars but to accumulate more Bitcoin (BTC). They probably realize now that this process may not be worth it for a while as the number of people who buy or sell has decreased as Bitcoin (BTC) traded further along the wedge and triangle.
Their timings might differ but none of these interest groups want to see another bear market. First of all, it would completely obliterate the miners. Second, the current trading volume on exchanges will dry up. In addition to that, we will have a bear market for the next four to six months which they cannot afford as they already know they have a limited time left before decentralized exchanges take over. Similarly, all the accumulated Bitcoin (BTC) is no good to whales if they are going to sell it at a loss or hold it for four to six months.