Bitcoin falls for the first time in history for seven consecutive weeks. What’s next for the cryptocurrency?
On the scale of the weekly Bitcoin chart, the seventh consecutive red candle closed. That is, by the end of the week, the value of the main cryptocurrency was seven times in a row lower than at the beginning of the week. This is a new “record” for Bitcoin, which the day before had also fallen below $30,000. Unfortunately, many experts agree that this is not good for those who expect BTC to rebound in the near future. We’ll tell you more about what’s going on.
It should be noted that despite the collapse of the cryptocurrency market, there are not fewer people willing to mess with Bitcoin. In particular, the number of addresses with more than 0.01 BTC exceeds the 10 million mark. This means that people are ready to invest their own money into the coin and surely believe in its serious prospects.
What will happen to the Bitcoin exchange rate?
According to CryptoSlate sources, BTC has fallen for weeks before, but there were still moments of “respite” in previous downtrends when the cryptocurrency rose slightly. Consequently, a number of red candles on the 1-week chart were green.
As a reminder, for a candlestick to be red, the asset must be lower in price at the end of its period - in this case, one week - than at its beginning. We wrote more about the features of Japanese candlesticks and their use in trading in this article.
Bitcoin needed to “close” above $33,928 to avoid a seventh consecutive weekly red candle. And while there has been a rise in the cryptocurrency’s price of around 22 per cent since hitting a local bottom at $25,406, Bitcoin ended the week several thousand dollars below its target. Many experts believe that this decline indicates that we are now officially in a global bearish trend.
A crypto-enthusiast and trader under the nickname Rekt Capital commented on the anti-record on his Twitter account as follows. Here’s his rejoinder.
Lots of noise around the seventh consecutive red candle on the 1-week Bitcoin chart. After all, this is the first time this has happened in history. The most in the history of BTC has been five consecutive red weekly candles. None of them marked a global bottom on the chart. They actually preceded further declines in the Bitcoin price.
Much fanfare is surrounding the 7th consecutive red #BTC Weekly Candle
After all – it’s a first time ever occurrence
Most $BTC ever seen was 5 red Weekly Candles in a row
Neither of them marked out a generational bottom
They actually preceded further downside #Crypto #Bitcoin
– Rekt Capital (@rektcapital) May 9, 2022
Read also: Billionaire who invested half in Bitcoin isn't afraid of cryptocurrency's downfall. And here's why.
Meanwhile, the volume of long positions or so-called longs in Bitcoin trading on cryptocurrency exchange Bitfinex rose by 60 per cent overnight. As a reminder, the previous all-time high was set in July 2021. A long position is a leveraged purchase of an asset by a trader, i.e. with funds borrowed from the exchange to secure all or part of one’s balance.
Accordingly, this figure indicates a growing number of traders who are willing to bet on the further growth of the major cryptocurrency.
Last time the rapid growth in longs was accompanied by a local bottom on the Bitcoin chart, i.e. investor activity allowed the cryptocurrency to move to the growth stage.
Something interesting is also happening in the dynamics of short positions or shorts. During last week’s sharp drop in the BTC price, their volumes rose quickly, but then dropped again. In other words, a noticeable portion of market players made money on the fall of the major cryptocurrency, but later closed short positions.
Bitfinex Technical Director Paolo Ardoino noted that the aforementioned indicators indicate the start of BTC accumulation by large bidders, i.e. the so-called “whales”. Here is a quote in which the expert shares his view of what is happening. The replica is cited by CryptoSlate.
Some whales are increasing their existing longs heavily. Keep in mind that they may be hedging themselves elsewhere, so all this does not necessarily indicate a rapid rise in cryptocurrency.
That is, Ardoino emphasises that long positions in the futures markets are often offset by selling BTC on the spot market. This strategy can provide a hedge against further market volatility, depending on how the trader sets his limit orders in the futures contract.
We believe that the digital asset industry is really not at its best right now. One of the reasons for the market's collapse was the activity of the Luna Foundation Guard, which tried to resuscitate Stablecoin by actively buying it. However, in fact, what is happening may not lead to a prolonged bear market: after all, the cryptocurrency industry has developed significantly since 2018 and now helps many investors on a daily basis. This means it won't be easy to lose interest in the coins - at least that's hinted at by the events of recent days.