Soft Around The Edges
Bitcoin continues to trade in a relatively soft manner since failing to sustain an ATH break-out last week. Today's report investigates the sources of market weakness, and how it may affect the bull.
G’day Folks,
It’s never fun seeing the Bitcoin price pulling back, especially after what has been a remarkably frustrating cycle of seemingly endless sideways chopsolidation.
As I noted late last week, this failed ATH break is far from a convincing signal that the bull has been slain, however it’s certainly a weakness we should consider carefully moving forwards.
The thing that keeps me up as a Bitcoin analyst isn’t missing a euphoric and insane blow off top, those tend to be fairly self evident, with lots of indicators reaching overheated conditions at the same time.
Instead, the thing that I’m always looking out for, is evidence that the bull dies with a sad little whimper, rather than an explosive bang.
In other words, I worry more about the bull run ending whilst everyone is looking at the chart like this cat…but misses that there has actually been a cool down in the core drivers of demand.
In today’s post, I am going to dive deeper into the major sources of BTC demand, and look for evidence of a meaningful cool down in demand. The question I am trying to answer, is not whether sell-side pressure has overwhelmed the market…but instead what if the demand side just runs out of gas.
We’re going to look at everything from the ETFs, to Treasury Companies, to the cash & carry trade. We will then close with an initial onchain assessment using my Top Heaviness framework, which I use to identify the start of more serious bearish market conditions, to see if we have the requisite ingredients for one.
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