Large speculators' appetite is slightly decreasing

In the previous article about Bitcoin, we discussed the rise in the number of large speculators, the distortion of the bearish structure in RSI, and a bullish breakout in MACD (on the daily time frame). Since then, MACD and RSI have continued to trend higher, with the RSI reaching the overbought zone. At the same time, the ADX began to trend higher, suggesting the bullish momentum has been strengthening; however, the ADX’s low value reflects that the trend is still very weak or neutral. In regard to Bitcoin addresses, the large ones (+ 1,000 BTC) have held relatively steady, while those with balances exceeding 100 BTC kept decreasing. This dynamic hints at a decreasing appetite for Bitcoin among large players (which follows a period with an aggressive rise in the number of large speculators); a drop in the figure will be slightly alarming. As such, we think stepping out of the market and waiting for the new attractive setup to arise is preferable.

Illustration 1.01

Illustration 1.01 shows the daily chart of BTCUSD and an upward-sloping channel. A failure of the price to defend the ground above the channel’s upper bound will be slightly bearish.

Technical analysis gauge
Daily time frame = Bullish
Weekly time frame = Bullish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of multiple indicators.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor or any other entity. Your own due diligence is highly advised before entering a trade.

Comment:

The number of large speculators is not declining despite Bitcoin breaking above $50,000. It seems there is probably more room for Bitcoin to run. However, sentiment in the stock and cryptocurrency markets can quickly change after the release of today’s inflation numbers (if hotter than expected) in the United States, which might be one thing to think about.