Why Can’t Bitcoin (BTC) Rise? Here Are The Reasons!

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After the last sharp decline, a slowdown continues on the Bitcoin side. Although we expect a slowdown after hard movements, it takes too long, bringing doubts about the rise. Now let’s evaluate why there are no rises together.

First, this loss of momentum is not just for Bitcoin, there is a pullback across the markets. American indices constitute a locomotive for all markets. The upcoming slowdown in them shows its effect in all markets. If we look at the American indices, we can see that there has been a recent pullback. They have reached their 50-day average. In general, some sales (3%-5%) may come after the new peak. However, we know that these sales usually come at the beginning of the week and recover towards the end of the week. From this point of view, these sales seem to have lasted a little long. So there is a weakness.

For this reason, Bitcoin is also affected by this situation in the indices. However, there are some technical weaknesses for Bitcoin as well. First of all, I would like to summarize the technical situation for you. If we look at the red level from the chart I have attached below, we can easily see that it is the level where Bitcoin received a strong reaction. This $53,000 level is where Bitcoin was hit hard. So, it works as a major resistance level for us. Taking on this will be the first step for new movements. We must follow this level.

Secondly, the yellow level is our main support. As you can see, even though it fell slightly below the hard sell at $53,000, this level has been supporting us for a long time in general. For this reason, falling below this level will directly put the upward trend into difficulties. This is the level we will follow as support.

I was expecting it to fluctuate between the green and yellow levels for a while, as Bitcoin tried to slow down and stabilize for a while after the hard sell. He made a move first to yellow, then to green. However, this rise is not strong for now. Because we can say that the volume that went a long time ago has not yet arrived.

volumelessness

Voluminousness is the biggest risk for trends. If we cannot observe a strengthening and increase in volume during the rise, we should always be ready for decreases and retreats. The weekly chart below shows us the status of Bitcoin. If we follow the orange lines, we can clearly see that the volume is gradually decreasing and the price is rising during this time. So the price goes up without volume. This is a major reason why Bitcoin has not been able to continue its upward movements lately. Because the higher the price, the more inclined sellers are to sell. So, sales are stronger. Therefore, in order for the price to continue to rise, buyers must become stronger and continue to push the price upwards. I explain this with a simple example.

Imagine that the price rose from $50,000 to $60,000 in a single candle. The volume on this $10,000 (20%) spike is 50,000 BTC. This is a pretty strong rise. A strong buyer base of 50,000 BTC overpowered the sellers, pushing the price up sharply. But now consider the opposite. In the same rise, this time the volume will be only 50 BTC (I am giving the example absurd so that it can be better understood). So let only a 50 BTC buyer cause the $10,000 (20%) rise. Do you trust this rise? Of course, you shouldn’t trust it. Because when the price rises to a significant resistance or there are some negative mismatches, a strong seller can easily pull the price down. You wouldn’t expect a weak 50BTC buyer to stop that strong seller, would you? Here the volume shows us how strong the trends are. In Bitcoin, on the other hand, the gradual decrease in volume worries me.

There is a negative dissonance on a weekly basis

If we take a look at the orange levels on the weekly chart below, we see that the RSI is falling as the price is rising. That is, the RSI is in a downtrend while the price is in an uptrend. This is what we call negative dissonance. These mismatches do not threaten an uptrend but a trend. If the price rise is not supported by the RSI, it could break the trend. It is very important in this respect.

I have mentioned many times in my analysis on Twitter that a similar mismatch is in the daily chart. Particularly noteworthy is that the price does not drop immediately during the RSI divergence. That is, the price may continue to rise during the divergence. If the dissonance is not broken, after a while, the price drops sharply and disrupts the trend. That is, if the dissonance is not eliminated, eventually the trend will end in frustration. Below I leave the graph of that mismatch in the diary. You can clearly see the reason for the incoming drop.

Golden Cross

If we look at the 50 (green) and 200 (red) daily averages on the Bitcoin chart, we can see that a Golden-Cross has formed. This is positive for the price. However, we cannot say that it is working yet. The recent hard sell of BTC pushed down the price and then the averages. For this reason, the averages crossed each other, but could not establish an advantage over each other. If the price goes below the yellow level, then it will take the averages with it and the Golden-cross will be broken. Therefore, it is vital for the trend not to go below the yellow level.

In summary, there is a weakening in the trend with the last sale. Volume is what is needed for this weakening to end and for Bitcoin to continue its rise. As I said, it’s more important to get voluminous long candles than long candles. The arrival of a strong audience of buyers frees Bitcoin from these risks. Otherwise, even if the price goes up without volume, it won’t go a long way. However, we have not seen them until now. This lack of volume worries me deeply. We can manage for a while until the FED meeting, which will be on the 23rd. However, something must happen within this month for the trend to continue.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.