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The previous week was filled with bullish pain in the cryptocurrency market. From May 9 to 12, the volume of liquidated positions is $3.2 billion. The forced closing of long positions accounted for more than $2 billion. At the same time, there was a significant influx of BTC coins to cryptocurrency exchanges. All of these signs are a classic example of a mass and panic selloff. There is no doubt that last week the market crept up to the maximum of fear. Over the weekend, the situation stabilized due to a decrease in trading activity. But what will happen next?
Bitcoin starts the week with a downward breakdown of $30k. The coin is actively consolidating in this area, hoping to gain a foothold above the round mark and continue the upward movement. Technical indicators indicate a period of price stabilization with a gradual decline. RSI and stochastics are directed to the lower border of the bullish zone, while MACD continues to flat move below the zero mark. Buying power will spoil the failure of consolidation with a gradual exit into the $31k–$30k range.
The Fed's policy and the strengthening of the US dollar have a long-term effect. The market is developing long-term strategies that will make it possible to effectively manage capital in cryptocurrency, so it is still too early to talk about a complete stabilization of the situation.
The price behavior upon reaching the $24k mark is very similar to the classic formation of a local bottom. Long lower wick, rising candle and subsequent stabilization. However, if we assume that the cryptocurrency market is in a bear market, then it is too early to talk about the end of the price drop. The price has been in a downward movement with local consolidation pauses for more than six months. Such a long downward movement is typical for a bear market.
However, at the same time, the asset fell only 63% from the all-time high at $69k. This suggests that the decline will deepen, because in bear markets, the price loses from 70% to 90% of ATH. However, before this, a period of accumulation starts, the first stages of which we can observe now. This is due to the fact that there was a powerful surge in the realization of losses in the market in order to save some part of the capital. The influx of coins on the exchanges also confirms this. This will provoke the activation of large investors who will begin to accumulate BTC coins.
At the same time, there is every reason to believe that the price drop will continue due to manipulative actions. This is indicated by the growing number of longs, which looks illogical for the current level of fear (14). If we compare the number of long and short positions, then there will be no doubt that we are waiting for a manipulative pumping of the market with longs, followed by a price drop. It also says that in the near future the market may see a slight increase in Bitcoin, which will be aimed at pumping the asset with longs.
Combining these two facts, one can see a clear strategy of big capital, which gives the bait in the form of large volumes of long positions, and then provokes mass liquidation of hundreds of millions. The crypto market and Bitcoin are in a phase of active accumulation, which is accompanied by sharp price drops and "knocking out weak hands." If you look at the medium-term scenario, you can smile, because in this way the "whales" fill the tank with bullish fuel.
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