Recently, CME futures volume has increased dramatically. This underscores the magnitude of the move that is capable of unfolding even after this weekend’s convulsive volatility. It also raises concerns that whales and miners are using futures to do a mass liquidation. It remains to be seen whether the buyers have enough conviction to step in.

$3,800 may be the important level to focus on in Bitcoin (BTC). What happens there may determine the next big trend (Figure 1).

 Figure 1

One topic that was mentioned over the weekend was the pump and dump nature of the Saturday-Sunday move.  What many don’t realize is that dramatic upswings followed by dramatic down moves is common at market bottom.

Figure 2 shows Gold futures doing three hardcore “pump and dumps” in 2001. The price of Gold at that time was near $250. It was also interesting to note that the final dump took out the entire post 9/11 rally.

 Figure 2

Gold currently trades north of $1,200.

Homebuilder stocks (XHB) at the bottom in 2009 also showed wild volatility (Figure 3).  A two-month rally from $8 to $14 off the 2009 was wiped out by a two-month decline from $14 to $10. XHB peaked last year at $48.

 Figure 3

Bottom Line: Hopium is a dangerous substance in the crypto world, especially after sellers made a major attempt to assert themselves. That said, there is a case to keep an eye out for stabilization. Nobody wanted stocks in 2009, and it seems people feel the same way about Bitcoin (BTC) in 2019.