DeFi
“The drop before the rise” say Bitcoin analysts
Former Glassnode analyst James Check sees more “chopsolidation” on the agenda.
The market is confirming the warning signs of a Bitcoin price crash predicted by James Check, former principal analyst at blockchain analytics firm Glassnode.
Check explained in its bi-monthly newsletter, chain checkthat several indicators are preparing it for lower prices. BTC is already down 6% this week at $58,000, continuing last week’s sell-off, which validates Check’s thesis.
According to Check, who analyzed a multitude of charts, most traders have a net long bias, which tends to be a bearish signal. He added that most short-term holders are underwater, with $21 billion in unrealized losses. That number is even higher today, as the market has fallen and liquidated another $300 million.
“We’re at a point where more stress is likely,” Check predicted days before today’s sale, telling The Defiant that his analysis is not intended to predict prices — which he says is “not a useful exercise” — but rather to describe general market trends.
Short-term BTC holders’ supply is in decline
That said, Check predicts a “chopsolidation” in the future, a trend that many other analysts have also expressed.
Scott Melker, a prominent cryptocurrency trader, explained that his technical analysis shows that Bitcoin has bottomed out, although he called it a process. The independent analyst added that the asset is likely to continue this sideways consolidation for the foreseeable future.
“It would be nice to see that upward trend again,” he said. wrote. Yesterday, Melker explain that the market is close to the signal it is waiting for: a daily close below $60,300. A recovery would offer a bullish divergence and could clear the track.
“I’m just looking for an entry point”
Although technical analysis is not an exact science, it can help predict trends in a highly transparent market like Bitcoin.
But that’s not the case for Taras Kulyk, CEO of SunnySideDigital, a Bitcoin mining company.
He told The Defiant that “most investors are probably trying to push through negative sentiment so they can position themselves for a better entry point into a BTC position.” Kulyk said continued institutional interest in the ETF space should serve as a more appropriate target for investors to focus on.
Numbers to go out Analysts in the Bitcoin ETF space, however, agree more with Check and Melker than with Kulyk’s optimism. Aside from a few days of massive inflows in early June, the last few weeks have been marked by inflows amid the selloff, indicating that the market is mostly undecided about its direction.
The market may be in the “midsummer doldrums,” as Melker has repeatedly put it, although CoinShares’ James Butterfill has previously said that the data doesn’t indicate there’s even a concept called the midsummer doldrums.
A collapse is underway, but Check remains confident
Check remains unfazed by the possibility of a bear market – something other analysts have floated.
What gives him “some confidence” is that the amount of Bitcoin in unrealized profit/loss is not yet at the levels of mid-2021, when it triggered the prolonged downturn that eventually saw BTC trade at $16,000.
But he is patiently waiting for a possible new decline, in particular to dissuade those who think that $73,000 is the peak of the cycle.
“That’s what we’re looking for, ultimately, to see parts distribute at a lower cost,” he said.