[0246] Crypto Market Sags, Despite Trading Volume Rivalling 2017-18 Bull Run
Despite the positive sounding ( if not, click-baity ) headline, the fact that the current total trading volume rivals the peak of the last bull run is... well... umm... a negative.
How?
If you look at the chart, the amount of trading volume is increasing. So how is that a bad thing?
The fact that the total market cap for crypto is only in a slight uptick, despite the increased trading suggests something isn't right. Why won't the lead balloon inflate? We all want it to, so what is the problem?
For Bitcoin to only rise 10-15% in the last month, with all that extra attention suggests that there is increased activity, yes. But there is also a lot of sell-side action that keeps the price in check.
Sure, altcoins have been popping off but don't mistake that for positivity. The random nature of those gains, while amazing, is like trying to catch pop corn. Which one will pop next?
Sure, chase altcoin gains but just know that the overall market is teetering on a correction. You can almost heard the floorboards creaking under the strain.
Now before you scream FUD, there's a lot of evidence to suggest a downturn to a "double bottom".
What could add fuel to the fire is a recent report ( source escapes me at the time of writing, but it has been talked about quite widely ) indicated that 90% of trading volume is... fake. False reports by crypto exchanges who want to appear more popular and liquid than they are.
Even if the report is incorrect and all reported volume is accurate, you're still looking at a market that is trying to grind it's way upwards via hopium rather than organic and lustrous growth.
As I wrote in earlier posts, the crypto market is in "despair" in terms of the market cycle. And "desperation for gains" after a long bear market is one of the drivers of growth in the retail market. A market populated by amateur investors, most of whom are up to their eyeballs in some kind of credit card or mortgage debt.
So I take the current market sentiment and calls of "altcoin season" with a grain of salt. I'm also very wary of a whole bunch of scaredy cats exiting the market should things even show signs of a downtrend.
Don't get me wrong, there are gains to be made but be quick to exit the market with your bag of cash when you make them. There is no solid bottom of the market yet, let along strong and sustained confidence in the price, so a correction is an increased risk when trading right now.
News is not all bad. In fact, none of what I have said is negative or FUD. It's just probabilities. And if you're an investor, you factor for possibilities and don't sit around wanting the market to move higher.
If I had to apply a timeframe, we're looking at a correction in April and a month or three on the bottom before a strong and steady incline for the next bull run. I expect June-July will be the confirmed bottom of the market. So I'm saving my pennies and selling anything not bolted down on eBay.
Thanks for watching,
Brendan Rohan - Indie developer of 'next gen' natural medicine from Melbourne, Australia
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