Bitcoin [BTC] traders, before you become exit liquidity, read this

Holders of the largest cryptocurrency, Bitcoin [BTC]may have a reason to rejoice in the coming days, blockchain analytics platform, Sentimentrecently found.

According to it, the just-ended trading session last weekend was marked by an increase in interest in BTC on several social platforms.

Santiment further noted that among the top 100 cryptocurrency assets, BTC was in over 26% of discussions for the first time since mid-July.

It added that this increase in the royal coin’s weighted social sentiment over the past weekend was an indication that an extreme level of FUD persisted in the BTC market. According to the analytics platform, this usually triggers an increase in the price of an asset.

Source: Sentiment

Not so fast

While the correlation between an increase in the social activity of a cryptocurrency asset and a corresponding growth in its price cannot be underestimated, BTC’s movement on the price charts suggested that the recent uptick in the asset’s social activity should not be taken as conclusive evidence of an impending price rise.

Firstly, according to data from CoinMarketCap, BTC changed hands at $18,763.01, after falling 1.40% in the last 24 hours. However, trading volume was up 14.18% over the same period, leading to a case of “down volume.”

Down volume exists when the price of an asset falls and trading volume rises within the same period. This is usually an indication of bearish trading. Therefore, BTC sellers had been on a rampage for the past 24 hours.

BTC on a daily chart

A look at the coin’s movement on the daily chart confirmed this position. At the time of press, the asset’s money flow index (MFI) came closer to the oversold position at 10:18 p.m. In fact, BTC’s MFI had been falling consistently since it broke the 50 neutral line on September 15th.

The Relative Strength Index (RSI), also in free fall since September 13, was at 39.90 at the time of writing. The consistent fall in these key indicators suggests only one thing – waning buying pressure.

Furthermore, the position of the Moving average convergence divergence (MACD) at press time gave more credibility to the view that sellers were in control of the BTC market.

Represented by red histogram bars (albeit short), there was a downward intersection between the MACD line and the trend line on September 18, indicating the start of a new bear cycle.

Finally, BTC’s Directional Movement Index (DMI) showed sellers controlling the BTC market on a daily chart.

At press time, the sellers’ strength (red) was 24.36 solid above the buyers’ (green) at 10.74. It has been like this since 14 September.

Source: TradingView