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Is the Worst Behind Us Yet?

Given the relatively poor start to the new year, it’s no surprise a common question atop the minds of all digital asset investors is “wen bottom/reversal?” In last week’s “Markets Insights”, we discussed a few tools that we can use to help visualize and track the macro trend including GMMAs (guppy multiple moving averages) or Daily/3-Day Heikin-Ashi candles.

This week we decided to reframe the conversation a bit. With 2021 in our rearview, we now have the benefit of hindsight analysis, and one thing is pretty clear; BTC traded within a (admittedly large) range for the entirety of 2021, oscillating between ~$32K and $62K, with a few deviations on either side of those range highs and lows. We highlight this in the below chart looking at BTC’s weekly candles over the last year; using weekly (or even monthly) candles helps unveil a more clear, longer term market structure with much of the day-to-day noise filtered out.

Within the above chart, you’ll notice a gray volume profile/histogram to illustrate how bitcoin’s volume was distributed over the last year (see left axis); each section of the volume profile is labelled as either a High or Low Volume Node. High volume nodes (HVNs) are areas where a lot of volume was transacted and ‘balance’ was a