The last several weeks have rarely provided any respite; glimmers of hope are often short-lived while daily rebounds are quickly overpowered by sellers looking for a less-worse exit price. One of many questions that investors have been asking is when we may see some kind of bottom or reversal begin to form. Our previous notes have discussed a handful of useful technical tools to help visualize current trends, which we find helpful to track how market conditions continue to unfold.

Bitcoin Continues Exploration of Range Lows

In “Sour Sentiment & Sideways Markets”, we observed that BTC traded within a range for the entirety of 2021, oscillating between ~$32K and $62K. Deviations, or failed breakouts and breakdowns, are highlighted in their respective red and green boxed areas. For those who read the aforementioned note, you will recognize a gray volume profile (with High Volume and Low Volume Nodes) is included again to illustrate how bitcoin’s volume was distributed over the last year (see left axis). For a more in depth explanation of this concept, please refer back to this note.

As a quick refresher, we discussed the concept of price moving from periods of balance (HVNs) to periods of imbalance (LVNs), before finding a period of equilibrium, and that price often moves swiftly through areas of imbalance; it didn’t take long for that to manifest as BTC quickly dropped from $42K to $34K just a few days later.

We also noted that as price builds at the edge of a High Volume Node, the more likely it is to accept within and start exploring the opposite edge of that node. This phenomena was clearly visible in that 10-14 days of consolidation at the edge of the HVN, leading to acceptance and further exploration of this node.

No Go From GUPPY…Yet

Several weeks ago when market structure first broke, investors started looking for reversal signs. Our response to this was to provide some context around some trend following tools that can be helpful in these situations, most notably the Guppy Multiple Moving Average (GMMA).

A month has elapsed since our first introduction of the GMMA (see here for our initial insights post), and it’s been over two months since the market reversed from all