Sleeping bear or Somnolent Bull

What is the big hairy deal? What is actually happening in the crypto markets? I submit that nobody has a clue. Well, maybe that's a bit harsh, but it is certainly a possibility.

More realistically, there is simply too much happening too fast and it creates so much confusion and uncertainty that it's very difficult to determine any consistent sense of where it's all headed. Technical analysis is all over the map from doom and gloom Death Crosses to massive breakouts like this You Tuber is preaching. Fundamentals? Good luck with that. Fundamental analysis of stocks and other financial instruments is based on things like quarterly reports and market share. The crypto market is still developing the metrics and business models that will provide the data for good fundamental analysis.

But there is one indicator that is relatively informative. Total volume.  Where is the volume? Looking at the run up into the all time highs, volume was intense. But since then it's slowly drifting down to less than one third of what it was. This indicates is a lack of conviction - but a lack of conviction by both bears and bulls. If the majority of traders thought the market was truly overvalued, then they would be leaving in droves. Volume would be high on a downward price trajectory. Conversely, bulls would be jumping in grabbing coins before as quickly as possible so they can ride the rocket up.

Neither of these is happening. Bulls and bears are either fighting it out, locked in a battle for supremacy. Or they are sleeping. Or maybe having a nice polite tea, discussing the latest sports news while they wait for market clarity.

But we need to be careful. The chart above gives volume in USD. It doesn't tell us how much crypto was traded. If you do a really dirty calculation, you can get some sense of the number of "coins" traded. At the all time high the ratio between volume and market cap was 18.5. Today, that ratio is 27.5. If the coins in circulation is constant (it's not, but the change in 3 months isn't all that much for this this quick and dirty analysis), then we can say that the number of coins being traded today is much less than at the peak.

In other words, people are sitting on their stacks. There are fewer coins flying back and forth. No conviction. They are waiting. The bear is sleeping. The bull is snoozing.

Which way is it going to go when the alarm clock goes off? I say back up. Why else the interest by people like George Soros and the Rockefellers?