Bitcoin (BTC) is about to do the unexpected as a historically accurate indicator emerges: analyst Nicholas Merten
As bearish sentiment builds, closely followed crypto analyst Nicholas Merten says Bitcoin (BTC) will surprise everyone.
In a new strategy session, Merten shares with his 516,000 YouTube subscribers that while the price action for BTC remains grim, one indicator suggests the downtrend is behind us.
“I want to get on my feet and make a bold claim about the crypto markets. Especially since the mood at the moment is incredibly anxious. It’s right here, now, whether you think we need to keep going lower in price for the past several months, that we’re in a bear market, or that you feel the recent correction has bottomed…
Right now, we are far more likely to see a significant price rally that recoups much of the losses than we are going to continue lower.”
Merten says that historically, large spikes in volume on the Bitcoin chart have served as reliable indicators to confirm trend reversals. He points out that the volume spikes in both March 2020 and May 2021 coincided with the bottom of price corrections.
Source: Data Dash/TradingView
With a large surge in volume now being printed following the collapse of the Terra ecosystem and subsequent market volatility, Bitcoin is preparing for an unexpected rally, according to Merten.
“The weekly time frame gives us a very good view of when throughout history there have been capitulation events, that there have been major liquidation events in the market that effectively spiked volume and thus a significant price decline…
This market is driven by credit. Powered by leverage. Many of the big ups and downs are caused by long-term market participants taking a little too much risk than they should.
That’s what led to the sharpened price rallies, market rallies and all the new all-time highs we set, but it also played a role in the sharp 50% corrections we’ve seen during this cycle, many times before.”
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