Bitcoin Data Is Giving A Stark Warning To Crypto Investors – Forbes


Bitcoin, up by almost 30% over the last week, has recaptured the attention of the world’s investors and traders (as well as the media) after being trapped in a bitter, more than year-long, bear market.

The bitcoin price, still far from its all-time high of almost $20,000 per bitcoin, exploded out of the gates early last week after rising steadily throughout March, leaping over 20% last Tuesday alone and crossing the psychological $5,000 mark.

Now, technical data appears to show bitcoin is at its most overbought since December 2017, when it hit its all-time high, with similar trading patterns preceding heavy sell-offs.

Bitcoin and cryptocurrency markets have been recently enlivened by bitcoin soaring past the $5,000 per bitcoin mark.

Getty

The data, taken from the GTI Global Strength Indicator technical analysis tool and first reported by financial newswire Bloomberg, shows bitcoin is at its most expensive level for almost 18 months.

However, bitcoin, along with other major cryptocurrencies ethereum, Ripple’s XRP, litecoin, and bitcoin cash, have so far held on to their recent sizeable gains, though last week’s mini-bull run appears to have found its ceiling, at least for now.

The bitcoin price, currently trading at around $5,227 on the Luxembourg-based Bitstamp exchange, climbed as high as $5,300 on Monday before falling back.

Despite the recent uptick, the bitcoin and wider cryptocurrency market remains well under its all-time highs. Some $400 billion in value has been wiped from the cryptocurrency market over the past 18 months as adoption stalls and banks put closely-watched plans to wade into bitcoin and cryptocurrencies on hold.

GTI data shows bitcoin is at its most expensive level since late 2017.

Bloomberg

With data showing bitcoin is overbought, but the market continuing to hold onto its gains, analysts have been trying to explain the reason for the recent sustained uptick, with some pointing to low volatility.

“The market got so compressed, volatility was so low, it just went poof! It broke out. It was released from the cage,” Bloomberg Intelligence analyst Mike McGlone told the newswire. “Now it’s 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.”

Many have signaled suspicion around the longevity of bitcoin’s latest price surge, with the sudden rally apparently sparked by a large trade order from a mysterious buyer, which set off a wave of algorithmic buying as computer programs scrambled to place orders of their own and not miss out on the sudden price surge.

Analysts and market commentators have warned that without either an increase in bitcoin and cryptocurrency fundamentals or a sustainable flow of cash, this latest rally could be short-lived.

However, ahead of bitcoin’s breakout last week, data had suggested a bitcoin and cryptocurrency bull run was imminent.

Despite bitcoin’s recent leap higher, the price remains far below its position 12 months ago.

Coindesk

In February technical data showed a new bull run could begin this year after bitcoin’s 50-week moving average dropped below its 100-week moving average for the first time since April 2015.

Meanwhile, bitcoin and cryptocurrency sentiment has recently been boosted by a bevy bullish comments from those in the tech and crypto industry.

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