Currently, there is a striking silence in the crypto markets, despite the constant antics of the US President. Prices have barely moved for days, and many traders and analysts are puzzled by this apparent calm after the sharp declines of the past few weeks. Chris Vermeulen of TheTechnicalTraders speaks of a typical “calm period” before potentially strong price movements again. The big question remains: Was the recent crash already the end of the downward trend, or is something even bigger in store?
The markets remain under pressure
Vermeulen currently sees clear signs pointing to further downward movement, meaning a bottoming out is still pending. He emphasizes that the market is already in a bearish phase and that short-term price increases could simply be illusions. These so-called “dead-cat bounces” are often used by institutional investors to gradually reduce their positions. They create the impression of a recovery while, in reality, reducing their holdings.
A clear sign of this was recently seen: Despite massive selling, some trading days appeared to close positively. Less experienced traders could be deceived into believing the market is already recovering, while in reality, heavy selling is already taking place in the background. Popular analyst David Lin, who has more than 266,000 followers on YouTube, also views the current situation critically. He points out, in particular, that even traditionally safe investments such as US Treasuries and the dollar have recently shown unusual weakness. This could be a signal that confidence in the US economy is generally declining.
The next crash may be imminent.
Historical market cycles clearly show that sharp declines are often followed by a short recovery phase before sharp downward movements begin again. Vermeulen and many other experts believe that we could currently be in just such an intermediate phase. Another crash would therefore not be surprising. – In crypto as in the stock market.
The next few weeks could be crucial. Investors should remain particularly vigilant and avoid acting hastily. It is precisely in periods like these that opportunities to profit from falling markets often arise – provided you recognize the signs in time.
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