Markets Still Looking Healthy Despite Red Week — Price Analysis

As the weekend hurtles toward us, with never sufficient speed, it’s time to take stock of the crypto markets as a whole.

The broad stroke is that we’ve seen a week of pullback across the markets, in both Bitcoin (BTC) and altcoins. Things got choppy this week with some sharp fakeouts, and two big selloffs to keep bulls on their toes. For Bitcoin, we saw $10,000 repeatedly sold off and the regional uptrend line break, even as a Golden Cross completed (not a surprise). The general tenor in the markets remains one of caution and correction; however, we are seeing bulls hold the line.

To get a feel for where the money is flowing in the crypto markets, we have a dominance-esque chart below: ETH/Bitcoin on the top (a sort of unofficial dominance chart for the leading altcoin), Bitcoin’s market dominance, and the “Others” dominance chart (midcaps and below).

ETH chart by TradingView

What we see on both Ethereum and the ‘Others’ trends is that, while they both saw some selling and drops in the past week, both of their larger trends remain up. Thus, we can surmise that altcoins are likely to continue eating into Bitcoin’s market share in the longer term, which is a sign of risk-taking and confidence – but of course, we have not actually yet seen that larger trend resume.

If we look on a smaller timeframe chart (12-hour) of just Bitcoin’s price over its dominance, we can see this relationship more clearly.

BTC chart by TradingView

Bitcoin’s dominance has risen during the week even as its price has fallen. This is due to altcoins being sold back into Bitcoin, and also due to Bitcoin being sold into stablecoins or cash positions.

Bitcoin long positions on Bitfinex saw a sharp but not large decline as prices fell and long stops triggered, while shorts mostly went flat (slight gain).

This is good news for the bulls, first of all because long contracts have not been selling into profit lately as they did in January; and second because many are staying in their long positions even on this downturn.

BTC chart by TradingView

Shorts are building, and have not been at this level since last September. These shorts are likely to keep building if price continues to climb, until either a very sharp drop sends shorters to take profit, or a huge surge takes out stops and provokes margin calls (liquidations). One thing is clear, though, the recent drop was not the windfall shorters were looking for, with hardly any change in the levels.

Finally, we have caught some news that searches for crypto are again on the rise on Google. This is a chart of searches of the word “cryptocurrency” worldwide.

Source: Google Trends