Eight Consecutive Red Closes: Is Bitcoin Headed For A Recovery?
May 23 2022 - 07:00PM
NEWSBTC
Bitcoin for the past two months has been closing consecutive weeks
in the red. The previous week had seen it close its seventh
consecutive weekly candle for the first time in history, and
although investors hoped that this would end with a reversal, the
digital asset has gone on to mark another week in the red. This
makes it the first time ever for bitcoin to see eight consecutive
weekly closes, causing major panic among crypto investors. Eight
Weeks Red Not Bad? Normally when a large digital asset such as
bitcoin is closing multiple weeks in the red, it points towards a
massive bear market on the horizon. Now, it can be safely assumed
that the crypto market has successfully made its way into the bear
market. This has been the reason for the low and negative momentum
among investors over the last couple of months. But with bitcoin
closing so many weeks in the red, it is expected to get worse.
Related Reading | Long Liquidations Continue To Rock Market As
Bitcoin Struggles To Settle Above $30,000 One thing that has been
consistent when bitcoin has closed multiple weeks in the red has
been the downtrend that has usually followed the market. Even
though there are those who see this as a time to accumulate, the
massive sell-offs triggered by these red closes have simply won out
in the end. These types of consecutive negative weekly closes have
become known as an unavoidable part of being in a bear market. BTC
marks eight consecutive red close | Source: BTCUSD on
TradingView.com However, the market has never seen anything like
this. It would be natural to want to use historical context when
something alarming occurs but with no point of reference, there is
no way to tell where the market might go from here. Bitcoin
In For A Bear? Even though there is no historical context to
compare the current market conditions to, the opposite has happened
before. Last year, bitcoin had recorded eight straight weeks of
green closes. What followed this was multiple bull rallies that saw
the price of the digital asset eventually hit its all-time high of
$69,000. If this were to be taken and compared to current market
conditions, with the eight consecutive red closes, the digital
asset is likely in for multiple dips and crashes that will likely
send it back into the $20,000 territory. So it is very likely that
the bottom of the market is not as many would like to believe.
Related Reading | MicroStrategy Will Not Dump Any Of Its
Bitcoin, CFO Reveals There are indicators that suggest otherwise
though, such as bitcoin trading above its 5-day moving average. But
this is only a good indicator for the shorter term as longer-term
indicators remain bearish. Small investors are also picking up the
pace when it comes to accumulating BTC. The number of Bitcoin
wallets with more than 1 BTC on their balance had recently touched
a new high, now sitting at 844,906. While this points to positive
sentiment among these investors, in the grand scheme of things,
these smaller investors hold too little to actually move the
market. So if there is to be any recovery, the digital asset would
need some movement from larger holders. Featured image from
Unsplash, chart from TradingView.com Follow Best Owie on Twitter
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