We all know that 2018 has been hard on crypto
The markets have remained stagnant lately, volume is low, every price rise is soon countered by a price drop.
But today I saw something on the BTC chart that I haven't seen in a long time...
Made with TradingView by Bit Brain
This is a good sign for crypto😇
Look at the chart above (ignore the lines I drew in). Notice anything different?
Even an inexperienced amateur investor will probably spot the short-term BTC breakout. Before I continue, so as not to cause any confusion: the black lines are the converging triangle I drew to track when the breakout would/might occur; the blue ones are similar, but they include the outlier price spikes (I prefer using arrows to the proper coloured in triangle tools - sue me). The breakout occurred as expected. That's not the news.
Now look at the type of breakout
See how the candles form a sort of ladder ascending to the right of the chart? It's evenly ascending, small gains build on one another. That's the news.
"Silly news Bit Brain! That's normal! What's so remarkable about that?"
Well here's the thing: it isn't normal, at least not in the current market.
I look at a lot of charts every day. I see climbs like this all the time, so I very nearly missed it too. Until I zoomed out a bit:
Made with TradingView by Bit Brain
Ignore all my little breakout converging triangles again, what do you see in this chart covering the last month and a half?
BTC hasn't climbed evenly like this during the entire charted period. It has only climbed in "jumps"
Take a look at all the other price climbs, and I mean all the other climbs. Every one is a sudden jump in price. I've highlighted them for you:
Made with TradingView by Bit Brain
The sudden jumps indicate rapid buying. Being a 30 minute candle chart, you can see that most of those buys are over within an hour, sometimes less. The price jumps upwards a few hundred dollars and then coasts downwards over the next few days.
I wish I had the answers - all I have are guesses
I can't tell you why this has suddenly changed. I suspect that the rapid price jumps could be, and this is just a theory, large investors or small groups of investors jumping in with big buys every time that BTC hits their target price. Whether this is institutional money or not I don't know. I do know that Joe Soap in the street doesn't change BTC price by $200 - $1000 when he buys. As soon as the price hits a maximum price target, the buying stops and the buyers wait for BTC to coast downwards in price again. (If you analyse it further, and I'm not going to do that now, you can read further into the buying levels, the amounts bought, how the buying candles line up with each other etc. There are several such interesting patterns on this chart, but I'm already speculating enough with this post and it would be pointless for me to share such unsubstantiated information with you at this stage.)
For some reason this changed within the last 24 hours, sustained low-level buying has returned. If you want to see the last time that we had some sort of sustained buying, then you will have to go back to 17 May, almost two months ago, where a sustained four day buy took place.
I can't tell you what this means for future price action, how long it will last or who is doing the buying. I can tell you that this is a change and that a change in investor behaviour could well signify some sort of change to the market as a whole.
I'll be watching this space eagerly and learning as I go. As I said in this post about crypto experts: "Even with all of the theory under my belt, the market will still do things that I can not predict and that I haven't seen before. As long as the market can keep surprising me like that, I'm not an expert yet.". I hope to add this event to my knowledge database and use it to improve my forecasting abilities in the future.
Let's see what this means for the crypto market - if anything.
Yours in crypto,
Bit Brain
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by Bit Brain
