HOME CATEGORIES WRITE AND EARN 🔍
CATEGORIES WRITE AND EARN MORE

CRYPTO NEWS

Your favorite crypto news blog

Analyst: Bitcoin Could Be Forming a Local Top as Indicators Overbought

Bitcoin 2020/12/22 11:00 by Nick Chong

Bitcoin has undergone a strong correction since the $24,300 highs seen this past weekend. The leading cryptocurrency currently trades for $22,600 though fell as low as $21,800 around 24 hours ago.

BTC is down 5% in the past 24 hours. Bitcoin is outperforming most cryptocurrencies, which appear to be plunging as a result of a strong dominance move. This dominance move may have been triggered by the rumor that the U.S. SEC will finally be pursuing legal action against Ripple regarding XRP.

Analysts think that Bitcoin may have formed a local to medium-term high after the peak this past weekend.

Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom

Bitcoin Likely Forming a Top in Near to Medium Term

Bitcoin may have formed a medium-term high after peaking at $24,300 this past weekend, some analysts have said.

The chart below was shared recently by a leading trader. It shows that on a medium-term basis, Bitcoin may have found a top due to a strong surge in the weekly relative strength index (RSI) and the stochastic RSI. Both indicators are currently in an extremely overbought range, suggesting that a pullback for this market is due.

Of course, as the trader caveats, these indicators can stay overbought for extended periods of time. They have just shown him that it is ok to be cautious with further longs in the current environment:

“Weekly RSI and Stoch RSI significantly overbought. It has been a trending market and oscillators can remain overbought – but I’m just being cautious here…. Local top?”

bitcoin

Chart of BTC's price action over the past few years with an analysis by crypto trader "TraderXO" (@Trader_XO on Twitter).
Source: BTCUSD from TradingView.com
Related Reading: Tyler Winklevoss: A “Tsunami” of Capital Is Coming For Bitcoin

Strong Fundamentals

While Bitcoin’s price action is weak, the on-chain fundamentals remain strong. Rafael Schultze Kraft, CTO of Glassnode, recently noted that with the number of BTC held on exchanges decreasing, he thinks a supply-side liquidity crisis is playing out:

“#Bitcoin is in a supply and liquidity crisis. This is extremely bullish! And highly underrated. I believe we will see this significantly reflected in Bitcoin’s price in the upcoming months. Let’s take a look at the data.”

Image

Chart of BTC's price action over the past decade with an on-chain analysis of BTC on exchanges from Rafael Schutlze Kraft, CTO of Glassnode 
Chart from Glassnode, a crypto data source

Analysts think that further accumulation by long-term investors will only force Bitcoin higher over time.

Related Reading: 3 BTC On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Shutterstock
Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
Analyst: BTC Could Be Forming a Local Top as Indicators Overbought

0 Like(s)



You should also read...

Bitcoin 05/07/20 22:00 by Nick Chong
Bitcoin Surged 150% After This Signal Last Appeared. It’s Almost Back Again
It’s been a slow past few weeks for the Bitcoin market. After hitting $10,500 at the start of June, the cryptocurrency has entered a short-term downtrend. While some say that this price action i...
Read More
Bitcoin 18/07/20 19:14 by Nick Chong
“Have Your Popcorn Ready”: Bitcoin Volatility Is At Extreme Lows
Shunning Bitcoin’s lack of trend, altcoins have seen extreme volatility over recent weeks. Take the example of Chainlink (LINK), a community-favorite altcoin that is up by around 450% since the ...
Read More
Bitcoin 22/07/20 12:00 by Nick Chong
On-Chain Metric Signals the Bitcoin Market Isn’t Overheated: Why This Is Bullish
Despite the recent stagnation, Bitcoin is still up by over 150% from the capitulation lows of March’s crash. By the standards, that means that BTC’s nascent market is at exuberant levels ďż˝...
Read More
Bitcoin 06/08/20 01:59 by Nick Chong
Zcash Just Surged 12% as Bitcoin Stagnates: Here’s Why
One of the best-performing crypto assets of the past 24 hours has been Zcash (ZEC). According to data from Trading View, the cryptocurrency has gained 12% over the past day’s trading session, ou...
Read More
Bitcoin 04/11/20 11:00 by Nick Chong
Analyst Who Predicted Bitcoin Rally to $14,000 Says $14,500 Is Next
Bitcoin has undergone a strong rally since Monday’s lows of $13,200. The leading cryptocurrency currently trades for $13,900, up 3.2% in the past 24 hours. Bitcoin is trading slightly below its ...
Read More