Bitcoin's Weekly Candle closed bearish, opening at $66,676.88 and closing at $63,210.01 - a decline of -5.20%. This is Bitcoin's second negative close in a row.
Bitcoin Weekly Chart
Volume Profile Analysis shows that Bitcoin has reached the bottom zone of the High-Volume Node we have been ranging in since achieving a new All-Time High in March.
A Low-Volume Node lies below us, stretching from approximately $60,823 to $52,581. As we have seen many times, price moves quickly through Low-Volume Nodes to seek liquidity in High-Volume Nodes. Thus, a descent into the LVN would shatter any expectations of support until the $52,000 zone.
There are small bumps within the Volume Profile, giving potential Take Profit Targets for short positions or potential bounce zones for quick counter-trend Longs at $59,210 and $57,025.
Bitcoin Volume Profile
Price is currently testing the Weekly 21EMA, which served as Support on our last encounter with it the week of April 29th. Following that test, Bitcoin was able to rally approximately 27% to form a higher low within the range.
The Weekly Volume Delta Indicator also shows that while Sell Volume has been and is still dominant, that Delta is decreasing, meaning that Buys were more prominent last week than the week prior. With a fresh weekly candle, this is a metric I will watch closely to gauge the potential for a reversal in price.
Bitcoin's 3D chart gives us more clarity. Volume Delta has increased over the last three candles, culminating with the highest sell pressure we've seen in over a week. This occurs as we test the 3D 55EMA, which similar to the Weekly 21EMA, resulted in a 27% bounce the last time we came close.
3D Time Transformation is very close to the oversold level, and we are lower than the last registered low of TT on this timeframe back in January of 2024, which was the bottom of the Opening Year Slump.
High sell volume coming into an area of Support often results in temporary reversal of price.
Bitcoin 3D Chart
The Daily Chart shows us in very close proximity to the 200 DEMA, a level that has not been tested at all this Bull Run. Volume Delta shows overwhelming sell pressure that we have not seen since the last "bottom" on May 01 of this year, which again, resulted in a 27% bounce.
Time Transformation is oversold to a degree that we have not seen since the previous Market Cycle Bottom in August of 2023.
Bitcoin Daily Chart
Moving down to the 4H Chart, relevant points are that Time Transformation is oversold, and the previous 4H candle registered such high sell volume that we haven't seen since June 07, which was the Bearish Engulfing candle that began this current downwards trend.
Bitcoin 4H Chart
Moving to USDT Dominance, we can see that on the Weekly Chart, USDT Dominance is in the process of confirming a Double-Bottom (higher low) or W Pattern, if this Weekly Candle closes at the same price of higher, that will be a successful close above the neckline, and potentially a close back above the 200 WEMA as well.
This successful completion would move USDT Dominance back up to 6.0-6.5% of the total crypto market cap, and serve as a much broader warning for a more-pronounced market correction.
USDT Dominance Chart
Looking at Exchange Flow, we can see that last week Exchange Inflows dominated, however they decreased in strength as the downtrend progressed. Saturday witnessed a net outflow of Bitcoin, and Sunday saw a very mild inflow of Bitcoin to exchanges.
Bitcoin Exchange Flow
Miners are still selling, however they have begun to decrease their selling volume. This trend has historically led to short-term reversals in Bitcoin's price.
Bitcoin Miners Net Position Change
The HODLer cohort is also selling, and this trend has not slowed.
Bitcoin HODLer Cohort Net Position Change
In conclusion, although short-term price action indicates we have reached an important level of support where selling pressure seems to have reached a climax, there is insufficient buying pressure from the HODLer cohort or clear signs of bullish conviction to justify spot entries into Bitcoin at this point.
Investors should continue to sit in cash, and await more lucrative buying opportunities, and traders should wait for more clear signs of a potential reversal before entering long positions.
