A market is not always simply bullish or bearish. It's a relationship between the two diametrically opposed investor sentiments.

Day traders will always trade, their trades and associated volume are of no consequence here. They don't indicate the overall performance of the market or greatly affect it. But two things do:

• Are the bears selling?

and

• Are the bulls buying?

Turning of the Tide

Brokeback Bears

From https://www.pexels.com/photo/brown-and-white-bear-plush-toy-42230/ , shared under the CC0 license , Modified by Bit Brain

I maintain that the the back of the bearish market was broken when the bears ran out of steam over half a year ago. A week into February the bears hit and formed the new BTC support level at about $6k.

BTC has not dropped below the 6 February bottom!

Okay, a few dollars below, but $100 does not mean that a support level has been broken and nullified. The same level has held - five times now.

I often hear the talk of lower BTC levels that still "need to be reached", which, in my books at least, is unrealistic utter nonsense. A market corrects 70% and you still want it to drop further? Give me a break...

Made by Bit Brain with TradingView

Many bears who held the first drop capitalised on subsequent rises and then sold their positions, getting out "before crypto crashed completely". Some sold on the first big rise to $12k in late February, others held a bit longer but then sold the rise to $10k in early May, others sold the more recent, smaller rises. These are what hodlers refer to as "weak hands" - investors who are unsure of their investments, and when scared, sit and worry that their investment will not recover, to the point that they eventually sell at what they perceive to be a half-decent price at the time. So every attempted rise was blocked by these residual bears (and a few clever swing traders), which is perfectly normal in market cycle terms.

But by far the most profound and enduring effect of the big bearish sell off was to scare the bulls into hiding.

Brokeback Bulls

By Acabashi [CC BY-SA 4.0 ], from Wikimedia Commons , Modified by Bit Brain

I don't blame the bulls for hiding. The market dropped; rather significantly at that. With the continuation of the market cycle, as described above, it has not been a good time to become bullish: the weak handed bears would simply be waiting to sell any rises. So the bulls have been hiding, or sleeping if you prefer. Or waiting...

Until now.

The significance of the latest price surge.

With the bears having run out of energy months ago, they have not been pushing for lower prices, but they have quickly sold off any good opportunities. But you can only sell off so much before you have nothing left to sell. To put it another way: there can only be so many weak hands in the market.

It is for this reason that the market has been moving sideways for a while. Highs have become lower and the support level has remained unchanged. Below the support level are bulls who do not want to sell - it's not dropping any further. The highs have been diminishing as people tire of letting the last few bearish weak hands sell off.

Until now climbs have been slow and drops have been rapid. Gradually the bullish investors would enter the market and start buying the price back up. The bear sell-offs have been rapid and steep. Within a short space of time the price would return to the $6k support and the cycle would repeat.

Only now we have just seen a positive sign that indicates a change in inventor sentiment: a rapid rise. The rapid rise is an indication that the bulls are becoming aware that the bears have run out of selling power. The major bearish sell-off ended months ago and the weak hands have now been all but shaken out. The bears have lost the ability to keep returning the price back down to the $6k support. For bulls this means that it is once again safe to start buying.

A further indication is that the BTC shorts are changing. I'm not going to reinvent the wheel; read this post by fellow TIMM writer @toofasteddie for more information.

The clever and the brave will buy first, while prices are still low. Like bears, bulls also have their "weak hands" equivalents. In bullish terms this is typified by investors who don't lead the market, but rather by those who play safe and buy in later once the uptrend is very obvious. This all results in the bull market taking off at a measured pace, as opposed to just a rapid jump upwards.

Eventually the bears will turn bullish as well. The strongest bears make take a while to come around, but eventually almost all of them will. Of course this market is just packed with uninformed and easily swayed traders who happily flip-flop between opinions at will. These people will never lead the trends, but they will certainly add volume and buying power to the market once it starts to build momentum.

Conclusion

I am strongly of the opinion that this is a good time to buy. BTC looks ready, and somewhat surprisingly, altcoins look even more ready. To say "DYOR" at this stage is tricky: what do you research? My advice is to read my previous posts and to see what I have been saying all along, the crypto market is a bull market by virtue of the fact of what it is: an emerging technology that has found the ideal market niche. It still has MASSIVE growing to do. This post from 6 months ago should get you pointed in the right direction. https://steemit.com/cryptocurrency/@bitbrain/bitcoin-price-predictions-chart-display-part-3-the-s-curve-more-good-news.

And remember: if you aren't willing to take a few risks, then crypto probably isn't the right place for you (though this is changing by the day).

Best of luck with your trades and investments. I'm always available for advice, just drop a comment.

Yours in crypto,
Bit Brain

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Published on

by Bit Brain

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