Former Glassnode analyst James Check sees more “chopsolidation” on the cards.
The market is confirming the flashing warning signs of a fall in Bitcoin’s price predicted by James Check, former lead analyst for blockchain analytics firm Glassnode.
Check explained in his bi-weekly newsletter, checkonchain, that several indicators are preparing him for lower prices. BTC is already down 6% this week to $58,000, in a continuation of last week’s sell-off, which validates Check’s thesis.
According to Check, who analyzed a plethora of charts, most traders have a net-long bias, which tends to be a bearish signal. He added that most short-term holders are underwater, with $21 billion in unrealized losses. That number is even higher today as the market dropped and liquidated an additional $300 million.
“We’re at a point where more stress is likely,” predicted Check just days before today’s sell-off, who told The Defiant his analysis doesn’t aim to predict prices – which he claims is “not a useful exercise” – but rather outline general trends in the market.
That said, Check predicts “chopsolidation” moving forward, a trend that many other analysts have also voiced.
Scott Melker, a prominent crypto trader, explained that his technical analysis shows Bitcoin bottoming, although he called it a process. The independent analyst added that the asset is likely to continue this sideways consolidation for the foreseeable future.
“It would be nice to see that chop to the upside again,” he wrote. Yesterday, Melker explained that the market is close to the signal he has been watching for: a daily candle close below $60,300. A recovery would offer a bullish divergence and could clear the runway.
“Just Looking For An Entry Point”
Even though technical analysis isn’t an exact science, it can help predict trends in a highly transparent market like Bitcoin.
But that’s not the case for Taras Kulyk, CEO of SunnySideDigital, a Bitcoin mining firm.
He told The Defiant that “most are likely trying to put out negative sentiment to be able to angle for a better entry point into a BTC position.” Kulyk said that the ongoing institutional interest in the ETF space should serve as a more appropriate lens for investors to be focused on.
Numbers coming out of the Bitcoin ETF space agree more with Check and Melker than Kulyk’s bullishness, however. Discounting a few days of whopping inflows in the earlier part of June, recent weeks have been plagued by inflows amid the sell-off, indicating that the market is mostly undecided as to a direction.
The market might be in the “mid-summer doldrums,” as Melker has repeatedly said, despite James Butterfill of CoinShares having previously said the data doesn’t indicate there is even a concept called the summer doldrums.
A Washout Is Underway, But Check Remains Confident
Check remains unfazed by the possibility of a bear market – which other analysts have floated.
What offers him “a bit of confidence” is that the amount of Bitcoin at an unrealized Profit/Loss is not yet at mid-2021 levels, when it kicked off the protracted downturn that ultimately saw BTC trading for $16,000.
But he is patiently waiting for potential further downside, especially to wash out the people who think $73,000 is the cycle top.
“That’s what we’re looking for, ultimately, to see coins distribute down to a lower cost basis,” he said.
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