Bitcoin Rallied on Fumes, Not Volume — And Now It's Paying the Price

[Alpen]

Bitcoin opened lower for the fifth session in a row. Analysts have offered plenty of explanations for why the cryptocurrency failed to reach $90K after breaking convincingly above $80K with no major resistance levels visible on the chart.

But one look at that chart raises a different question entirely: how did Bitcoin even manage to rally in the first place?

Spot market trading volume has been falling since February. In the first quarter, daily turnover dropping from $44B to $10B was easy to explain — BTC was stuck in a range. But during the April–May price rally, that figure fell another 22%.

This kind of divergence between volume and price trend has a name in trading literature and VSA theory: market manipulation. Bitcoin isn't the type of asset you'd run a classic pump-and-dump on, but the chart is showing something that rhymes with it.

It's unlikely anyone was deliberately pumping Bitcoin's price. What probably happened is that during the long consolidation phase, a massive chunk of capital rotated into BTC futures. Derivatives volume is now running five times higher than spot.

The danger with derivatives is that market participants can see exactly where stop-losses are clustered. Back in April, most traders were positioned short — which fueled the squeeze-driven rally. Now, speculators and market makers have taken out the bulls' stop-losses, and the market is dropping as those positions get liquidated.

Bitcoin will likely find its footing somewhere in the $73K–$74K range — the former top of the consolidation zone where the upward move originally began. Any attempt to rally again without real volume behind it probably won't get price back above $80K.

[Oshosondy]

Any attempt to rally again without real volume behind it probably won't get price back above $80K.

What do to mean as real volume? This is not something new in crypto. I can remember someone posted about this scenario:

I don't really like the way it started
Most times once the month starts on a pump note
It usually isn't a good month.
But chart wise everything goes well and the correction doesn't eat much of our month gain.
In all I'm quite positive for Q2.

If you want buying in a way that more people will not sell than buying, that can exist more during bull market, especially long period of time bull market.

I have posted that this is not bull run or altseason that some people are thinking. I have seen this pattern before in the paste.

[Hatchy]

If you want buying in a way that more people will not sell than buying, that can exist more during bull market, especially long period of time bull market.
I have posted that this is not bull run or altseason that some people are thinking. I have seen this pattern before in the paste.

Of course, this isn't any bull run..price is not yet ready because when we are in a bull run,it's very much easy to recognise. The only problem now is that price has been behaving a bit awkward. It buys a little then drops down with more pressure from the sell side. In march we could conclude alot that the sellers were still very much active since the volume of sellers were pretty high in the market. In April it changed hands and the buyers seems to have taken a grip of the market. But since we broke the resistance at $80k price has been falling slowly making it more difficult to tell where it's heading next. I agree with op on this, what actually was the reason behind the rally in April? It's all speculations though, who knows...

[Dave1]

If you want buying in a way that more people will not sell than buying, that can exist more during bull market, especially long period of time bull market.
I have posted that this is not bull run or altseason that some people are thinking. I have seen this pattern before in the paste.

Of course, this isn't any bull run..price is not yet ready because when we are in a bull run,it's very much easy to recognise. The only problem now is that price has been behaving a bit awkward. It buys a little then drops down with more pressure from the sell side. In march we could conclude alot that the sellers were still very much active since the volume of sellers were pretty high in the market. In April it changed hands and the buyers seems to have taken a grip of the market. But since we broke the resistance at $80k price has been falling slowly making it more difficult to tell where it's heading next. I agree with op on this, what actually was the reason behind the rally in April? It's all speculations though, who knows...

It's very easy, we are in year 1 of the bear market, so whatever higher highs we see, it's might be just a bull run as we are going to be in the consolidation phase in the next month or so. It's just good that we see the price going as high as $80k, but it's not going to be sustainable in a bear market.

And as you have said, the price has going down since hitting that barrier of $80k'ish. It's because that price is too tempting for speculators not to sell and make profit. So expect that the price will go on a decline and then consolidation phase throughout the year.

[Floczy]

Bitcoin opened lower for the fifth session in a row. Analysts have offered plenty of explanations for why the cryptocurrency failed to reach $90K after breaking convincingly above $80K with no major resistance levels visible on the chart.

If your doing technical analysis conserning Bitcoin, also realise that this is a market that creates and sweeps liquidity, just like Gold, NQ, etc.
Presently the market is more completed to analyse technically, unlike before where it rally from some levels (Fibonacci levels, support, trend line etc), now it can make an initial push from those levels to induce buyers the it can later come back and go lower just to take out liquidity,
So don't always expect market to make rally after rejecting to so called strong zones or levels wait for those levels to be taken out first.

[Exitoral]

Bitcoin opened lower for the fifth session in a row. Analysts have offered plenty of explanations for why the cryptocurrency failed to reach $90K after breaking convincingly above $80K with no major resistance levels visible on the chart.

For me based on the what I see the chart. Clearly on daily tf, double top happened at two occasions. First occasion was at $75703.663 and it failed. Then it happened at $81683.297 and it held. Tanking down with momentum. But if you look at the candlesticks closely, you will quickly observe it slowing down.

Bitcoin will likely find its footing somewhere in the $73K–$74K range — the former top of the consolidation zone where the upward move originally began. Any attempt to rally again without real volume behind it probably won't get price back above $80K.

For me, I think it will likely bounce upward from $75703.663. If not, it will tank down back to $58738.652.

[Odohu]

Indeed the recent rally experienced by Bitcoin was not supported by volume and by traditional technical analysis, it meant that the move was not going to be sustained. Such moves always happens but sometimes it does fail because volume can be injected into the market at any time with a single major news, that way the move will continue. Since there were no such news, we could see the drop in price and that may linger until the end of this month.

[philipma1957]

still up from 60k

so 76/60=1.267 and that means it is up 26.7percent from the low.

still a baby bull.

now it could be heading to the slaughter house and drop low enough that calling a bbay bull is wrong.

but up 26.7% from the low = baby bull

will it die a calf and we eat veal I do not know.

will it grow strong and big over 130k this year

i don’t know.


but I know this much the op does not know anymore than any of us.


also this is kind of like the 2019 rally. which means we may get to about 92-94k then crash back.

or we can do something new. which would be stay in a baby bull slot like 72k to 82 k for six or more months.

[Perfectbaby]

Currently market is really hard to speculate and predict what it would likely happened in the next few years and don’t be surprised that the current situation of the market could actually drop lower because there are people who could be that wanting to have such opportunity to enable them refill their bags.
 Those who invested when the market was around 62k they are taking much profits from their investments which resulting to a strong decline in the market but whenever it breaks out then expect it to hit 90k. In summary you should be able to know that the market is always volatile that is why it’s advisable to use spare cash to make investments without much panicking.

[EluguHcman]

If you want buying in a way that more people will not sell than buying, that can exist more during bull market, especially long period of time bull market.
I have posted that this is not bull run or altseason that some people are thinking. I have seen this pattern before in the paste.

Of course, this isn't any bull run..price is not yet ready because when we are in a bull run,it's very much easy to recognise. The only problem now is that price has been behaving a bit awkward. It buys a little then drops down with more pressure from the sell side. In march we could conclude alot that the sellers were still very much active since the volume of sellers were pretty high in the market. In April it changed hands and the buyers seems to have taken a grip of the market.

In the area converge, we are still dangling around the Speculation that volatility can be unpredictable and market movement too acting as if it is following a traditional format in reference to past performance is still not worth predictable because, buying and selling pressures are likely to set the market into confusion and that is why it seems like it moment of the Bitcoin market price has it terms of analysis Speculating what could be responsible for all the events.

As it stands currently, it is convince able that the selling pressures has more influence on the forces driving the market than the buying which is why we are experiencing more price declines even while the market struggles to recover during the institutions aggressive buying consecutively.

Moreover, this season based on historical performance should be bear season. So expecting price pump like we are in the bull could be impossible because the Bitcoin market is actually trying to keep to its 4 four years cycle standards.

[Alpen]

Any attempt to rally again without real volume behind it probably won't get price back above $80K.

What do to mean as real volume? This is not something new in crypto. I can remember someone posted about this scenario:

We should always check the daily trading volumes on the exchange. If they are increasing, it means the current trend is real. Otherwise, any price movement without volume is just someone's deliberate speculation, which will end with a strong move in the opposite direction

[M47AK16]

Bitcoin opened lower for the fifth session in a row. Analysts have offered plenty of explanations for why the cryptocurrency failed to reach $90K after breaking convincingly above $80K with no major resistance levels visible on the chart.

If your doing technical analysis conserning Bitcoin, also realise that this is a market that creates and sweeps liquidity, just like Gold, NQ, etc.
Presently the market is more completed to analyse technically, unlike before where it rally from some levels (Fibonacci levels, support, trend line etc), now it can make an initial push from those levels to induce buyers the it can later come back and go lower just to take out liquidity,
So don't always expect market to make rally after rejecting to so called strong zones or levels wait for those levels to be taken out first.

It was clear that we would not reach higher because of the lack of buyer potential, and I understand that you could make buyers be more excited about the potential but it is not looking like that's happening neither. EMA is obvious and BB is obvious, there is no evident way that we are going to make a lot of money. We gotta reach a place where it is going to be defensive for us, so be sure that you have your stop loss ready if it goes a lot more, like if it goes under 70k then it snot looking great, I would say that if you see it going under 70k, then reach 70k as stop loss.

[shinratensei_]

The biggest concern is indeed volume moving into future and derivative market making the entire market focused on squeezing the bulls instead of organic price growth.
However, if market is feeling bullish, it will disregard squeeze and go up endlessly. We just need more reason for bitcoin to go up higher because currently we are lacking the driving narrative.

Other than that, other biggest problem is people thinking the low for this cycle could be a lot lower therefore they keep opening short.

[GreatArkansas]

Bitcoin will likely find its footing somewhere in the $73K–$74K range — the former top of the consolidation zone where the upward move originally began. Any attempt to rally again without real volume behind it probably won't get price back above $80K.

I'm fine with this. What happened in the recent dump? When we drop below $80,000, for me is a healthy pullback. Right now, $80,000 is acting as significant short - mid term resistance, which, for me, is one of the keys we will see the $100,000 level easily again once we go back above $80,000.
I'm more positive to see $100,000 first than going back to $60,000 again.