The hammer candle is one of the more powerful reversal candles to "always" watch, across assets, especially after "one way" moves, like we have seen in bitcoin. On June 8 we pointed out the below;
"All bigger bounces since Dec last year occurred with bitcoin putting in the classical hammer candle before the squeeze started...As we showed a few hours ago, vol and skew are pricing a lot of panic, which usually is a contrarian "signal"."
Since then bitcoin is up almost 5k, pushing above the negative trend line and the 21 day moving average for the first time in "forever", but it's probably not time to get excited "for real".Bitcoin remains stuck inside the 32/40k range, and it needs to "work" off excess positioning inside this range, that should continue. Volatility remains one of bitcoin's main problems, and institutions won't be returning until volatility cools off.Latest "longer term" on bitcoin via JPM points out the fact backwardation in bitcoin futures is a bearish signal according to the bank. For the first time since 2018 futs trade in backwardation, basically showing very weak demand by institutions (something we have pointed out for weeks). JPM basically argues that they are keeping their negative view until the backwardation goes back to contango.Last chart shows bitcoin vols are down over past days, but in order to attract that big institutional flow, vols need to come down much more...