While Bitcoin’s price has seen a significant increment in the past few hours and there has been an increase in volatility, it is still not enough to place the digital asset in the clear coast. Technical indicators show that the virtual asset still has a lot of readjustments to do before its price finally kicks in.
Bitcoin Price Declines from $4,000
As at press time, Bitcoin is trading around $3,981 even though it was valued at about $4,000 a few hours. There has also been an increase in its volatility which was expected to move its price significantly higher due to traders need to take advantage of the profit margin, but it wasn’t the case.
There are also possibilities that its support might break instead of hold and if that happens, we may be looking at a price range between $3,850 to about $4,050. This can be attributed to the 100 SMAs (Simple Moving Averages) being below than the longer-term 200 SMA.
The relative strength index (RSI), on the other hand, is in the overbought zone where people tend to buy more due to the high rates. If the indicator moves south, it could trigger a selling pressure. Needless to say, this is not of certainty since the oscillator is a distance away from nearing oversold. The stochastic indicator is also moving up which could trigger overbought conditions.
Tom Lee Predicts Bull Market by August this Year
Asides these indicators, many have made their predictions as is the case of Tom Lee who recently stated that, Bitcoin’s bull market will be triggered in August this year. Therefore, Lee’s prediction differs from what the technical indicators are saying. He also addressed the fact that what needs to be fixed is the sharp drop from $6,000 to the $3,100 price level last year.
Fidelity Investment’s and Bakkt’s Platform to Attract Institutions
While all these forecasts are flying around, others are more relaxed hoping for the launch of Fidelity Investment’s Bitcoin custody service and Bakkt’s platform. These are expected to gain the interest of institutional investors who may have been reluctant to dip their feet into the crypto space.
Nevertheless, as Dan Morehead, CEO at Pantera Capital pointed out, the prices of these virtual assets themselves will have to kick in before they can garner a high level of interest from investors. He added that the market does not always operate on the ‘buy low – sell high’, given that more people tend to rush in when the prices are on the rise.