The Redistribution
If bull markets end when too many people, buy too many coins, at too high of a price...wouldn't a bottom form when those same people capitulate to new buyers at lower prices?
G’day Folks,
A green candle has emerged…but should we trust it?
This rally above $97k is the first constructive move the bulls have pulled off since the all-time-high, and any sane analyst should consider the possibility of it fading out into just another lower high.
The chart below shows the trade volume profile over the last two years, and there are a few key insights we can pull out of it:
The densest resistance zone above us has an upper bound of $97.5k, which is more or less the highest point this rally has tagged so far.
The air-pocket below us, between $70k and $80k is an obvious target for the bears, and I suspect they will work hard to set a lower high, and drive price back down into this area.
The next major support node below that air-pocket is around $68k, and you can imagine how rekt sentiment would be if we traded that far down.
Today’s analysis is going to dive deeper into the onchain and derivatives data, aiming to establish whether we should trust this rally.
There is no shortage of historical evidence where the second, and nastiest phase of past bears start following a rally just like this one. And yet at the same time, this bear has many properties that set this downturn apart.
Let’s dig into the data, and firm up the base case for what may come next.
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