Large Volume Spikes Signal A New Bitcoin Rally, According To Crypto Analyst
According to a popular crypto market analyst Nicholas Merten, Bitcoin (BTC) is about to surprise everyone, as the bearish market sentiment increases.
In a recent video update, Merten shared with the 516K subscribers to his YouTube channel that while Bitcoin’s price action looks quite depressing at the moment, there is an indicator that is signaling that the downward trend is over.
“I want to go out on a limb and make a bold claim about the crypto markets. Especially as sentiment is incredibly fearful right now. That is that right here, right now, no matter if you believe that we have further to go down in price in the preceding months, that we’re in a bear market, or if you feel that the recent correction was the bottom…
Right here right now, it is much more likely than not that we’re going to see a significant rally in price recovering a lot of the losses, than continue down to the downside.”
According to Merten large volume spikes in Bitcoin’s chart have historically been reliable indicators to confirm trend reversals. He refers volume spikes that happened simultaneously with the bottom of the price corrections in both March 2020 and May 2021.
Following the collapse of the Terra ecosystem and the subsequent volatility in the market, large volume spike have again appeared, which leads Merten to say that Bitcoin is could be getting ready for an unexpected rally.
“The weekly timeframe gives us a very good overview of when throughout history there were capitulation events, that there were major liquidation events in the market, that effectively led to spikes in volume and therefore a significant decline in price…
This market is driven by credit. Is driven by leverage. A lot of the major moves upward and downward are caused by long-term players in the market who are taking on a little too much risk than they should.
That has led to the exacerbated rallies in price, recoveries in the market, and all the new all-time highs that we’ve set but it also played a role in the sharp 50% corrections that we’ve seen throughout this cycle, many times before.”
