Another Leg Down for Bitcoin? Nightly Crypto Recap 5/30

While we have seen the likes of Ethereum and Zcash (hope you guys saw my post yesterday on Zcash) go nuts the past couple of days, Bitcoin has been stuck in the mud.

Where are we headed next?

Let's pull out our 4 hour chart!

1) Look at the Sell Volume!

Here is what scares me a little. Look at the volume spikes. When volume has been picking up, it is to the sell side. Now that could be troublesome in the short term, but that could also be a sign that Bitcoin is being unloaded as weaker hands sell their positions and they could run out of steam in the short term. The sell volume spikes aren't as dramatic as they were a few days ago which could already be a sign of that sell volume drying up. Look for a downward trendline break with a pickup in buying volume to confirm that buyers have indeed entered back into the market.

2) Momentum has not been Inspiring

If you ever notice a huge sell off in a few candles, and then it takes a lot more candles to get close to where the selloff began, that is NOT a good sign. We call that a dead cat bounce in the business and it is a short term relief of sellers, but buyers are also not rushing back into the trade making for another potential leg down when sellers get involved again.

I don't know if we will see another huge leg down at this point, but we are putting ourselves in a position where we have a lot to work out of. We are currently underneath all major moving averages and are in a downtrend. Bulls have a lot of work ahead of them if they are to regain this market!