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- Bitcoin has grown more than 9% over the past nine days, but on low volumes – a sign of low investor confidence. As a result, the gains could be short-lived.
- The divergence in bearish volume indicates that BTC could exit the bearish reversal model observed on the 4-hour chart.
- A breakdown by division, if confirmed, could result in a return to $ 8,000 or less.
- If trading volumes resume in the next 24 hours, prices could exceed $ 8,500 over the weekend, confirming a downtrend breakout earlier this week.
A clear divergence between prices and trading volumes on the charts suggests that the recent $ 800 Bitcoin Rally (BTC) could be short-lived.
Prices are currently up more than 9% from last low of $ 7,500 on June 6th. In particular, BTC boosted the bullish outlook in the short term with a move above $ 8,100 on Wednesday. The follow-up was also positive.
Yes, trading volumes have not increased as prices have risen, so the break-up lacks substance.
For example, the 24-hour volume of Bitcoin trades on all cryptocurrency exchanges is currently $ 19 billion, 42 percent lower than the $ 33 billion peak on May 16, according to CoinMarketCap.
More importantly, the daily volume of trade is high at an average of about $ 18 billion, from $ 7,500 to $ 8,300, which is significantly lower than the $ 24 and $ 29 billion sales volume observed. May 30th and June 4th.
While the broader market would be swamped by inflated volumes, large stock market figures included in Bitwise Bitwise's "real" trading volume computation also show that the recent price hike is not supported by wholesale volumes.
The best market capitalization cryptocurrency is currently trading at $ 8,270 on Bitstamp, after peaking at $ 8,335 in US trading hours yesterday.
Daily Chart (CoinMarketCap)
Bitcoin's daily trading volume has consistently exceeded its 50-day moving average from $ 4,000 to $ 9,000.
However, since June 6, the volume has been below the 50-day average, which casts doubt on the sustainability of the recovery, which went from $ 7,500 to $ 8,300.
Daily map (main exchanges)
As can be seen on the left, bitcoin transaction volumes on Bitstamp have dropped significantly over the last 10 days, with volume bars consistently showing lower peaks.
Volumes remain low despite the collapse of the bearish channel observed earlier this week, a sign of weak investor confidence in rising prices. In addition, the volume numbers on Coinbase and Bitfinex (top right) paint a similar picture.
This bearish divergence in trading volumes indicates that cryptocurrency could exit the rising wedge model (top left), confirming the end of the rebound from more than $ 7,500.
A corner ventilation, if confirmed, could result in a sale of $ 8,000. An inferior acceptance of this psychological support would expose recent lows to almost $ 7,500.
If trading volume improves in the next 24 hours, bitcoins would probably exceed US $ 8,500, confirming the decline in the number of channels announced Wednesday.
Disclosure: The author does not hold any cryptocurrency badets at the time of writing.
Bitcoin image via the CoinDesk archives; charts by Trading View
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