Bull Trap? Bitcoin’s Price Rise to $8,300 Isn’t Backed by High Volumes

Bull Trap? Bitcoin’s Price Rise to $8,300 Isn’t Backed by High Volumes

 

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Bitcoin has rallied more than 9 percent in the last nine days, but on low volumes – a sign of low investor confidence. As a result, the gains could be short lived.

The bearish volume divergence indicates BTC could dive out of a “rising wedge” bearish reversal pattern seen on the 4-hour chart.

A wedge breakdown, if confirmed, could see a return to $8,000 or lower.

If trading volumes pick up in the next 24 hours, prices may rise above $8,500 over the weekend, validating a bearish channel breakout witnessed earlier this week.

A clear divergence between prices and trading volumes on the charts suggests bitcoin’s (BTC) recent $800 rally could be short-lived.

Prices are currently up more than 9 percent from recent lows near $7,500 on June 6. Notably, BTC revived the short-term bullish outlook with a move above $8,100 on Wednesday. The follow-through has been positive, as well.Yes, as trading volumes haven’t picked along with the price rise, the breakout lacks substance.For instance, bitcoin’s 24-hour trading volume across all cryptocurrency exchanges currently stands at $19 billion – down 42 percent from the high of $33 billion seen on May 16, according to CoinMarketCap .More importantly, daily trading volume has averaged roughly $18 billion throughout the recent recovery from $7,500 to $8,300, which is significantly lower than the sell volume of $24 billion and $29 billion seen on May 30 and June 4.While the wider market is reported to be rife with inflated volumes, the numbers from major […]