Bitcoin’s Red Flag: Declining Volume

The Bitcoin struggle right now is declining volume. It has seen a nice run up to over $4,600 and has gone up 25% in just a week and a half. Yet, none of Bitcoin’s move upward has any substantial volume when you compare it to the price action since July. You would expect for such a huge leg upward, Bitcoin would have a more pronounced increase in the volume. Yet we are seeing across the major exchanges, volume is 50% of what it was back in August, and forget the peaks in September.

What should you do with this red flag? Traditional technical analysis tells you this is a sign of a weakening in momentum, but I’d encourage you to expand on that. Why is it concerning? I’ve been watching the order book the last few days and it seems whales are pushing up price everytime the ask side of the book becomes weak (they bid it up to nearest sell wall). I’ve seen some odd, legitimate sell and buy walls. Unlike before, I’m less certain of manipulation. However, it does seem the whales are “fighting” a bit.

Should you sell your Bitcoin? Probably not. I suspect we may still have even more of a run-up moving into the Bitcoin Gold hard-fork. I would consider selling it prior to the Bitcoin 2X hard fork, however, which I suspect will go much less smoothly due to both replay protection and the way it will split the community. We may see short-term effects on network that will cause a decline in price, especially since everyone is investing with the expectation of “free money.”

On the Ark front, I forgot to update in the video to say I’m still bullish and like any position below 60k. Since all altcoins are selling off right now relative to Bitcoin, I would think about setting an order in at roughly 40k Satoshi where this sizable support. I still like Ark in the medium-term (over the next year) since nearly any update will yield a spike in price given EVERY Ark post gets to top of subreddit due to bagholders.

Let me know your thoughts! Happy to know what your evaluation is of this choppy market. Best of luck everyone.

Fun Fact: If you noticed that the green candlesticks in thumbnail are filled and are wondering why, I had to fill them all in to make them visible for purposes of thumbnail. In fact, I had to recolor every candle in the graph for the thumbnail to more “neon” style colors so they were visible.

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Bitcoin’s Red Flag: Declining Volume

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Kane Dane