In a monumental plunge, the cryptocurrency market witnessed the obliteration of almost $200 billion in value today. The cataclysmic sell-off was driven by rumors circulating in the market that the Securities and Exchange Commission (SEC) might deny pending Bitcoin ETF approvals. This revelation sent shockwaves rippling through the industry, leaving investors on edge. However, amidst the sea of chaos and uncertainty, some are eyeing this market crash as a golden opportunity to enter the market.
The dip buyers, who have been patiently waiting on the sidelines, might finally have their moment. The downfall began earlier this morning when Bitcoin experienced a staggering drop, resulting in a chain reaction of altcoin liquidations. Bitcoin’s price plummeted by nearly 10%, while altcoins suffered even more significant losses, ranging between 20% and 30% from recent highs. The panic and doubt that have ensued from this sudden market downturn demand a different approach.
When uncertainty looms, it’s crucial to take a step back and assess the bigger picture. Transitioning from the daily timeframe to higher timeframes can offer a comforting perspective, contrary to the harsh reality depicted by the daily chart. The long-term view reveals a breakout that has been confirmed by a surge in trading volume. With the remainder of January left to close positively, the market has the potential to recover, transforming the volume bar from red to green. Such a development could mark the ideal “buy-the-dip” moment.
One cannot undermine the significance of volume in predicting market trends. Notably, a high-volume breakout following three years of declining volume could be a pivotal moment for the cryptocurrency market, indicating the start of a possible bull run in the coming months. When volume aligns with technical indicators and chart patterns, it often substantiates price breakouts. Case in point: the 1M BTCUSD chart revealed a close above the Ichimoku’s Kijun-sen, a phenomenon observed in 2020 and 2021, but absent in 2019. Additionally, Bitcoin also closed above the upper Bollinger Band, an event that exclusively occurred in 2020. Such signals, especially when accompanied by high volume, present a strong buy signal for investors.
It is important to note that this analysis is purely educational and does not reflect the opinions of NewsBTC on investment decisions. Investing in cryptocurrencies always carries risks, and individuals are advised to perform their own research and exercise caution before making any financial commitments. The information presented herein is to be used at your own discretion and risk.
The cryptocurrency market has endured a significant setback, but this could potentially mark a turning point. The prevailing circumstances offer a unique opportunity for brave investors to enter the market and capitalize on the dip. The high-volume breakout witnessed after years of declining volume points to the possibility of a bullish run ahead. However, as the saying goes, “Look before you leap.” It is imperative for individuals to conduct thorough research, exercise caution, and make informed decisions when venturing into the world of cryptocurrencies.