Bitcoin for the past two months has been closing consecutive weeks in the red. The previous week had seen it close its seventh consecutive weekly candle for the first time in history, and although investors hoped that this would end with a reversal, the digital asset has gone on to mark another week in the red. This makes it the first time ever for bitcoin to see eight consecutive weekly closes, causing major panic among crypto investors.
Eight Weeks Red Not Bad?
Normally when a large digital asset such as bitcoin is closing multiple weeks in the red, it points towards a massive bear market on the horizon. Now, it can be safely assumed that the crypto market has successfully made its way into the bear market. This has been the reason for the low and negative momentum among investors over the last couple of months. But with bitcoin closing so many weeks in the red, it is expected to get worse.
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One thing that has been consistent when bitcoin has closed multiple weeks in the red has been the downtrend that has usually followed the market. Even though there are those who see this as a time to accumulate, the massive sell-offs triggered by these red closes have simply won out in the end. These types of consecutive negative weekly closes have become known as an unavoidable part of being in a bear market.
BTC marks eight consecutive red close | Source: BTCUSD on TradingView.com
However, the market has never seen anything like this. It would be natural to want to use historical context when something alarming occurs but with no point of reference, there is no way to tell where the market might go from here.Â
Bitcoin In For A Bear?
Even though there is no historical context to compare the current market conditions to, the opposite has happened before. Last year, bitcoin had recorded eight straight weeks of green closes. What followed this was multiple bull rallies that saw the price of the digital asset eventually hit its all-time high of $69,000.
If this were to be taken and compared to current market conditions, with the eight consecutive red closes, the digital asset is likely in for multiple dips and crashes that will likely send it back into the $20,000 territory. So it is very likely that the bottom of the market is not as many would like to believe.
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There are indicators that suggest otherwise though, such as bitcoin trading above its 5-day moving average. But this is only a good indicator for the shorter term as longer-term indicators remain bearish.
Small investors are also picking up the pace when it comes to accumulating BTC. The number of Bitcoin wallets with more than 1 BTC on their balance had recently touched a new high, now sitting at 844,906. While this points to positive sentiment among these investors, in the grand scheme of things, these smaller investors hold too little to actually move the market. So if there is to be any recovery, the digital asset would need some movement from larger holders.
Featured image from Unsplash, chart from TradingView.com
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