The recent surge in the cryptocurrency market has changed the sentiment of most enthusiasts. However, cryptocurrency enthusiasts are still eager for the value of Bitcoin to shatter more resistance level, as it did at the $4,200 mark recently. While
Bitcoin is Overbought
A Bloomberg analyst, Mike McGlone, is of the opinion that Bitcoin is overbought; a similar situation it was during the Bitcoin bubble in 2017 before the bear market started. After the recent surge that took Bitcoin value to $5,300, it fell as low as $4,778 on Thursday, and the price is currently struggling to maintain a $5,000 level.
While citing a technical tool called the GTI Global Strength Indicator, Bloomberg’s technical analyst, Mike McGlone explained that in 2017 “The market got so compressed, volatility was so low, it just went poof! It broke out. It was released from the cage. Now it is a question of duration, and I suspect when you have such a massive bubble, you’ll always have an overhang of people who need to sell.” This infers that, probably, a bear trend is in the offing for the cryptocurrency market.
Also, the president of a crypto hedge fund – ProChain Capital, David Tawil told Bloomberg that bitcoin’s 20 percent surge past $5,000 was not a particularly comforting move and that he expects to see a near-term sell-off.
Tawil explained that “We continue to expect another leg downward. It’s nice to see a positive move as opposed to a negative move, certainly. But at the same time, for investor purposes, it’s not a particularly comforting move. Certainly, an investor would much rather see a gradual rise with constant floors in terms of downside being established, as opposed to a very, very quick run-up. It could be easy come, easy go.”
Meanwhile, a veteran trader, Peter Brandt noted on Twitter that bitcoin’s price could be on the verge of a “parabolic” phase, like the 2017 experience that drove Bitcoin to its all-time high. However, he cautioned that there is a chance that the market retests December 2018 low, $3,122 before forming a so-called double bottom and shooting higher.
Also, Fundstrat strategist, Tom Lee is of the opinion that Bitcoin whales have triggered the start of a Bullish trend.
Either the bear or the bull takes over in the near term as viewed by different analysts; there is a consensus among analysts that Bitcoin is bullish in the longrun.