Bears weakening, bulls still timid

Since the last update we have seen price struggle and slug along the lows, but overnight last night we saw a bit of a pop in the market. We are still confined to a falling wedge that has been walking us down to lower lows. The Rudex balance peaked around 175k and has now fallen to 164k. I do believe that seeing the amount of liquidity increasing on Rudex corresponds to a falling price. I also believe the inverse of that, decreasing liquidity, will cause increasing price.

Zoomed in on the 4h

We never really looked at time frames below the daily because we haven't had enough volume and trading activity for the charts to form patterns on those time frames, they tend to look like a bunch of sideways moving flat candles. On the 4h we saw a wick up creating a megaphone pattern. This pattern creates a lot of room for the price to range and has about a 50/50 chance of breaking to the upside or the downside.

Increasing number of market makers

We are seeing increased overall liquidity as more and more market makers join the smoke trading market. However, a vast majority of these market makers are coming from the smoke side, and are using smoke tokens to create their liquidity on the exchange, which is having a downward effect on price. If we saw more market makers coming into the market and using bitshares to create their liquidity, we would start to see price rise. Eventually this is bound to happen if the price of smoke gets low enough, because the lower it gets, the less liquidity a market maker can gain off of their smoke.

The Books

The Books show this increase in liquidity and market makers. The sell side has been relatively flat as price has fallen, but we have seen walls getting put up, and taken out, and more walls put up. We currently see a wall at .65 BTS with a steady increasing amount of liquidity above it. I feel this is a positive. Having a buffer of sell orders helps prevent unsustainable moves in price. If we see a big move up through heavy liquidity, it is a much more reliable move, than one that cuts through butter. We see heavy buy orders supporting price from our recent lows.

Big Bear Dump

We have had some consistent bears who have been selling to repeatedly drop price, but the crash to the recent low was caused by one big 20k bear dump by @sajibekanti. Based on my bitshares analysis, @sajibekanti did not add any liquidity back to the buy side, so it should be a one and done dump.

Bulls potentially exhausted but still pushing

We saw some bulls making steady buys in February, and they may have hit their accumulation targets because a lot of them have slowed down. We have seen some new bulls join the market and power up their purchases. They tend to buy in bursts and push the price up when they buy. If any of you are reading this, I might suggest that you might get a better price with steady cost average buying, maybe a little every day, as opposed to one big buy a week. With the lack of liquidity at these prices, a small buy could slip the price up or down as much as 50% pretty easily.

Conclussion

Short term the crypto market is bullish, so I could see this thing push up higher, and possibly confirm the megaphone pattern. That also means in the mid term we could still get slammed back down to the descending support line. That line is falling pretty fast, a month from now it's down to about .33 BTS. Crypto, what a wild ride.

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