The two big questions on every crypto investor and trader’s mind right now are, first, what is really happening in the crypto market and secondly, where are digital currencies headed to? Everyone seems to be lost on what is really going on in the crypto market and nobody seems to have a definitive answer.
If you ask about the fate of Bitcoin and altcoins, the kind of answer you get largely depends on the person answering it. For instance, those gravitating towards the bearish trend of Bitcoin will tell you that a crash is imminent while the bulls say the best is yet to come.
However, the market has so far remained sideways for quite some time now. We have not seen a major slump and neither are we seeing a bullish rally. Some would call it a calm before a storm but without a definite answer whether the storm is about to escalate or calm down.
It’s hard to predict what is about to happen next, just like the weather. The good news is that with the right data points, it is quite possible to make a more informed educated prediction about where the market is headed.
In this post, we are going to look at a few stats, facts, and indicators to determine where we currently are in the market and what we expect to see in the very near future.
Disclaimer
Before we proceed, it is important to first point out that whether you are a bear or a bull, nothing in this post should be considered as financial advice. Avoid the fear of missing out and jumping into the currencies we suggest here. This post is educational and for the purpose of expanding your mind.
Why the Crypto Market Has Been Sluggish?
If you have been in the crypto world, you’ll agree that the market has been quite lame in the not so recent past. Having analyzed Bitcoin’s price action via the Wycoff trading strategy for some time now, we have arrived at some possible scenarios about the crypto market that we’re about to share with you.
So, first things first, what is Wycoff’s theory and why does it matter?
Wycoff was a brilliant man who noticed that over 100 years ago financial institutions and large investors do indeed manipulate markets. After discovering and examining the influence of large players within markets, Wycoff noticed that these banks, institutions, and large investors normally create 4 constant price patterns over and over again. The patterns are actually designed to attract and then stop retail traders before the major trend occurs.
It is also important to note that Wycoff’s distribution schematics aligns properly with Bitcoin’s price action in April and May 2021. Several authorities in the crypto world including YouTubers even hinted at the manipulation taking place but they were largely ignored.
However, since the Bitcoin crash in Mid-May, Wycoff has become a well-known name among crypto traders and holders. Leading analysts even stated that we had entered the Wycoff accumulation stage during that time.
The exact duration of the accumulation pattern has not been easy to predict but as any good trader will tell you the longer the timeframe the stronger the trend. This basically means that to get a clearer picture, we normally do our Wycoff analysis on a daily timeframe.
So, if we assume that we are still in the accumulation stage, we have around 6 more weeks to go before we know where Cryptocurrency market is headed. It is also quite possible to see another major dip or none at all within the next 6 weeks.
The other Wycoff pattern we could be in may be redistribution. This type of pattern looks like another accumulation but results in another major consolidation before a more bearish move. If you check the current Bitcoin price pattern on a daily chart, you’ll notice that it looks quite similar to Wycoff’s redistribution pattern more than the accumulation pattern.
Do not panic, large investors and institutions know that most retail traders already know about Wycoff accumulation and redistribution schematics. It is therefore possible to see the big players violate the Wycoff pattern just as they violate technical analysis patterns that most retail traders use. The charts could be showing us a Wycoff redistribution pattern only to see a bullish trend reversal suddenly develop.
So, What’s Next?
One convenient aspect of the sideways movement of the crypto market is that prices can only go two ways — either up or down. When technical analysis doesn’t seem to give definite answers, we need to look beyond the charts.
If you didn’t know, the crypto market is actually a component of the broader financial market because financial institutions are already involved with crypto. Keep in mind that Bitcoin futures have been trading on the CME since 2017. It is believed that this was when manipulation in the crypto market started. Crypto is also correlated with the stock market, which is the de facto playground of all big institutions.
You may also have noticed that every instrument in the stock market is rallying while the crypto market remains flat. There are two possible explanations for the phenomenon. First of all, it is possible that we are on the brink of a huge drop across the board, which would prompt investors to sell their riskiest investments first, such as cryptocurrencies.
The massive drop could possibly be due to the pandemic. Investors are probably worried about more lockdowns happening and affecting economies due to the emergence of new COVID-19 variants. If a crash happens, then we could end up in a full-on bear market.
The second plausible possibility could be that investors are hesitant to buy cryptocurrencies because of other reasons besides risk. Leading market analysts state that big investors normally look for two things in the market namely resiliency and sustainability.
There are many big investors who pulled out of cryptocurrencies after China clamped down on mining and trading cryptos in May. However, Chinese miners have set up shop in other countries, which means mining will still continue on a global scale.
Conclusion
There are therefore several reasons why the cryptocurrency market has remained sideways while everything else is rallying.
The clampdown on digital currencies by several countries across the world and environmental concerns seem to have spooked both individual and institutional investors along with banks around the world banding together to foolishly try to develop rigid regulations. The good news is that the situation is improving as seen by the fast return of users to regular networks in both Bitcoin and Ethereum’s blockchain.
If institutions are actually looking for resiliency, sustainability in crypto then the recent regulatory moves against exchanges such as Binance is definitely the final frontier.
With that being said, the pandemic is still not in our rearview mirror, the progress being made in the space is a clear indication that Bitcoin and altcoins are definitely set for upward growth in terms of their fundamentals and overall price appreciation. Buckle up and prepare for a wild ride!
