Bitcoin technical analysis: What’s up with BTC?

At the time of writing, bearish short-term and long-term trends are still dominating the cycle, and sellers are clearly in control of every major top coin.

While the bounce on Monday gave some hope to crypto bulls that last week’s plunge was just a correction in an ongoing broader counter-trend move, so far, we haven’t seen meaningful follow-through.

Also, while volatility is relatively low, correlations are still elevated and volume patterns are bearish as well. I would expect strong sell signals with regards to the majority of coins. Unless the bearish pattern breaks, which hasn’t happened since last week, we can expect sellers to remain in control of Bitcoin’s price.

Bitcoin’s resistance support is currently sitting above $3,500, and I don’t expect price to slide below that level.

With that said, a quick recovery above the primary resistance levels, between $3,600 and $3,620, would be a positive sign here. However, until we see signs of technical strength, the defensive approach seems like a better strategy, as bearish risks remain very high.

Buy more, sell less

Some of the most prominent crypto-traders and investors, such as Alessio Rastani, Tone Vays, and Davincij15, seem to believe we may not have reached the bottom yet, and even if we have, we should expect the bearish momentum to keep going, with price moving at least sideways for the time being.

Until a new wave of fresh cash comes into the market, why would we think otherwise?

With that being said, more opportunities for accumulating Bitcoin continue to present themselves.

If you’re a long-term believer of Bitcoin, prices continue to remain attractive for increased accumulation, especially when volatility is at such record lows.

Dormant whales are waking up

Anonymous owners of sleeping Bitcoin wallets have been trading with greater frequency since October, which means their activity may have predated the November price collapse.

Data from Bitinfo recently showed that long-dormant Bitcoin wallets have accounted for about 60% of the market’s circulating supply in the last 30 days alone. What’s more, active Bitcoin supply has increased by a whopping 40% since the summer. This, of course, feeds into higher expected volatility.

If that’s not enough, consider that 1,000 addresses hold 85% of the total available Bitcoin. As Bloomberg recently noted, many of these holders remained on the sidelines during the 2017 bull run and its subsequent collapse. If dormant accounts are becoming active again, there’s good reason to suggest that the whales are looking to re-enter the market.

Patience, use the force, think

Rome wasn’t built in a day, so whatever incredibly positive long-term projections we might draw for Bitcoin, one certainty remains: the bear cycle isn’t over, and so short-term downwards price action is to be expected.

It’s reasonable to expect that Bitcoin will become more attractive at lower prices, especially as more institutional investors access the crypto market in the coming years. But that doesn’t mean the accumulation will happen instantaneously. Previous cycles have taught us that downtrends can stretch up to 48 months before any noticeable accumulation takes place.

Be patient and hold on to fundamentals!