A larger percentage of the market participants is excited about the ongoing rally to the upside (for most holdings)
You can't see the bigger picture…
In the course of my research, I began to wonder if this is a real market recovery Hope it's not another trap for traders ?
Do you want to attack me? Wait, let's talk about the facts — catalysts that fueled my bias
The rally is not sustainable ...
1. Low trading volumes; Rally without a crowd.
Isnt it fishy? … Trading volumes has always served as the heart of any market rally, it reflects directly the amount of participation from buyers and sellers.
We've seen series of Bull sessions, they have something in common — Increase in volumes across exchanges, retails and institutional investors.
Let's take a look at Binance and Coinbase, these companies is currently having a relative low trading volume compared to what it used to be like. Bitcoin's 2021 bull run, we saw over $70 Billion daily trading volumes — statistics has it that the current figures hover around $20-$30 Billion.
Is this bull session not meant to be robust ?
I'd be expecting your opinion …
Without a widespread contribution from all angles, we'd definitely lack liquidity needed to sustain this upward rally — Maybe, price manipulation from an anonymous cabal settled somewhere.
Don't forget
When the crowd is not participating … Feel free to question how authentic the rally is.
2. They are getting ready to leave — The Whales; red flag
On-chain analysis conducted recently has it that there an increase in Whale's transactions, especially transfers from private Wallets to exchanges.
We have seen this happen before … will it happen again? Maybe, don't sit back and watch happen.
In 2018, they left us. Selling Bitcoin strategically during the then price rally, it lead to a crash that cleared over $300 billion within couple of weeks.
Any clue? Yes, patterns states that something like that is coming up again — Major wallets with over 1,000 BTC have been liquidating their positions … it seems like this whole pump has been created for an exit strategy. It'd leave some retail traders with smaller holdings of overpriced assets in shambles — Especially, if the market turns bearish.
Don't forget
Always monitor what the whales are doing, it precedes some major market shifts.
3. The FOMO effect
This particular catalyst have haunted us for so long … it's not stopping soon
Why does it come into play during bullish trends ?
It came because you've been inviting it — Yes, you 🫵
It finally answered your call
The ICO boom of 2017 is a huge replica of what you'd expect whenever FOMO steps into the game — So many investors hopped on some tokens at the top.
Why at the top? They believed there was a signal ...
It happened like a dream … everything went down to -80%. Guess what happened? Debts — Huge debts, some participants took some loans because of the hype.
Unfortunately, social medias like Twitter (X), Reddit and others have been prompting this negative catalyst — building echo chambers to reinforce bullish narrative.
100%
200%
1,000%
10,000%
Even a Million can be created within a day once FOMO is active
What happens next?
It vanishes … over leveraged positions, panic sells once we start to see corrections.
Don't forget
As they'd always say, get rid of your emotions — Decisions made during this period don't always go well.
4. Shift in liquidity; Why is it leaving? Where to? — The exchanges
The tracks are everywhere, very visible … I don't know why you still can't see it
There's always an asset flow to and from exchanges, it gives us a view into what traders think and how they view the Market.
Whenever there's an incredible in the inflows, it shows selling pressure — Outflows have mostly indicated confidence in long-term holdings.
Exchanges like Binance and Kraken have seen inflows above 15% in the past week … Are they cashing out?
Comparing it to the immediate Bull sessions that we have had, 2017 and 2021 featured more of Outflows because traders moved their holdings into cold wallets expecting higher returns.
What is about to happen?
Are traders positioning themselves for a downturn?
Are we facing a false optimism?
Don't forget
Watch out for exchanges inflow … it has something to tell you.
5. Learn from the past — Historical fake-outs
History is a catalyst that we can't neglect … Humans tend to always channel their actions to replicate what happened before.
Nobody want to take that obvious step
Who wants to hold after a double Top?
Can you take that bold step? I don't think so
We'd always find ourselves paying attention to those levels of reversals, especially on the charts — weighing us down in that cycle.
In April 2013, Bitcoin traded above $266 towards $1,000 within some weeks … by November it went back to $150
In 2019, Bitcoin found itself sitting above $14,000 — it didn't stay longer, we watched it collapse to $6,500 by the end of the Year
Did you notice anything? November — End of the year
Both events had something in common
→ Low volumes
→ High FOMO
→ Whales impact
What is happening today ?
You're meant to answer that question — I'd be expecting your answers
Don't forget
Just like rhymes in music …
History is a rhyme in the crypto market — Pay attention to what happened before today … learn from the past to walk yourself through today.
Wrapping it up, let's talk about the elephant in the room — Macro economic factors
It is believed that the crypto market operates in a decentralized system — But, it's not immune to macroeconomic events … like inflation, interest rates, even global liquidity
In 2022, the Federal reserve's tightening policies led to a huge downturn in some assets, including crypto assets.
Even with the current rally, inflation rates are at their peaks in some counties — Central banks are bent on making it higher
Crypto doesn't run in a vacuum — Economic happenings affects it very much.
85% of the market participants are excited about the current Bull run … apart from the gains, how do we stay safe?
I've done Justice to some factors you should watch out for …
Trading Volumes
Whales activities
Macroeconomic activities
FOMO — Very important
It maybe another trap for unsuspecting traders who don't see the importance of a cautious decision.
With a Market Cap of over $3 Trillion, we have more than enough to go round the table — Stay safe and trade wisely.
Always bank on on-chain analytic tools like Glassnode and Whale Alert to make the most out of your decisions.
GM GM
