Volume indicator suggests that Bitcoin has no support on its way up
Despite the most recent relief in the cryptocurrency market, traders and investors are not rushing and remaining cautious, according to the volume indicator, suggesting there is no buying power present on most centralized exchanges.
The volume profiles between June 18 and June 24 remain descending despite the price facing and moving upward. Such a divergence might be a worrying sign since it suggests that the current short-term really is nothing but a short-term correction, which will lead to the continuation of the downtrend.
The same volume pattern prevails on intraday charts like the four and one-hour timeframes, suggesting that Bitcoin has no support from speculative traders and investors.
Is it really that bad?
The total absence of buying power could be a worrying sign for investors who bet on the upcoming reversal following Bitcoin’s return above $20,000, but there is no source of inflows left on the market because of massive liquidation volume and margin calls that institutions received during BTC’s plunge from $30,000 to $17,000.
A total disaster among institutional investors has driven them away from the market, and only a prolonged consolidation could attract more investors in the future, as it would mean that the market has stabilized and could offer positive returns in the future.
In addition to technical and market issues of the cryptocurrency industry, the hawkish sentiment of the Fed will most likely create constant pressure on risky assets like cryptocurrencies and tech stocks.
At press time, Bitcoin is trading at $20,900 and failing to gain a foothold above $21,000.