While bulls are hopeful Bitcoin (BTC) would sustain the current uptrend momentum to break $30,000, Nicholas Merten thinks otherwise, citing a rare bearish indicator.
In a Youtube strategy session, the top crypto analyst at DataDash noted that Bitcoin is at a point of contestment in terms of price action. Thus, the crypto asset would meet a long-term trend challenge in the coming days.
According to him, BTC is currently consolidating between its previous resistance ($28,361) in May while showing a buildup of price trying to make support on a trend line between relative highs back in late January to mid-February.
As stated by Mertens, he is ‘not too confident’ BTC would hold its current range ($27k – $29k) or even ‘squeeze higher’ in the short term.
In buttressing his points, he said:
“There are a couple of reasons for this we need to understand. First off, the risk-on indicators here, like ETH to BTC, are signaling that altcoins like Ethereum are underperforming against Bitcoin. This is already the first telltale sign that there is a strong direction here toward Bitcoin rather than the broader crypto space. So that optimism has not come in yet.
But to be completely fair, that’s kind of typical with most bull markets. So this to me is not really the biggest concerning sign so far. The biggest one is that we’re already starting to see, after only just two weeks of market positive cumulative volume delta, or market order flow, where there is more buy-side pressure when it comes to market orders than sell-side market order pressures.”
Merten added that the cumulative volume delta shows a downward trend of minus 3200, which indicates a possible BTC price slump. For context, Cumulative Volume Delta (CVD) measures cumulative changes in the volume traded by sell aggressors versus buy aggressors.
“Well, we can see that just after two weeks, after multiple months of having red sell-side pressure… We finally had two upward weeks of cumulative volume delta, and now, yet again, we are seeing a downward trend of minus 3200 on cumulative volume delta,” he told his 551k subscribers on Monday.
At the time of writing, BTC is up 5.45% in the last 24 hours and trading for $28,356 per coin.