Bitcoin has been closing in on the red mark for weeks in a row for the past two months. Last week saw it close its seventh consecutive weekly candle for the first time in history, and although investors expected it to end with a reversal, the digital asset moved to mark another week in the red. Has been. This causes eight consecutive weekly closes for the first time for bitcoin, causing great panic among crypto investors.
Eight weeks red isn’t bad?
Typically when a large digital asset like bitcoin is closing in the red over several weeks, it points to a major 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 past few months. But with bitcoin closing in the red for so many weeks, it is expected to get worse.
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One thing that has remained consistent when bitcoin has been in the red for several weeks is the downtrend that the market usually follows. Even though there are those who see this as a time to accumulate, the huge selloff that started with these red closes has finally been won out. This type of persistent negative weekly close is known to be 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 use historical context in case something dangerous happens, but without context, there is no way to tell where the market might go from here.
Bitcoin for a Bear?
Although there is no historical context to compare the current market conditions, the opposite has happened before. Last year, bitcoin recorded a green stop for eight consecutive weeks. This was followed by several bull rallies that saw the price of the digital asset finally reach an all-time high of $69,000.
If this is taken and compared to the current market conditions, with eight consecutive red closes, the digital asset is likely to have several downsides and crashes that will send it back to the $20,000 zone. So it is very likely that many people would not like to believe as the market bottoms out.
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There are indicators that suggest otherwise, such as bitcoin trading above its 5-day moving average. But it is only a good indicator for the short term as the longer term indicators remain bearish.
Smaller investors are also gaining momentum when it comes to depositing BTC. The number of bitcoin wallets holding more than 1 BTC recently touched a new high, which now stands at 844,906. While this points to positive sentiment among these investors, in the grand scheme of things, these smaller investors have little to do with actually moving the market. So if there is to be a recovery, the digital asset will need some movement from large holders.
Featured image from Unsplash, chart from TradingView.com
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