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Bitcoin Retakes $16k, But This Prominent Market Pundit Says It’s In Bubble Territory

Mining 2020/11/15 08:24 by Erie Maxwell
The Bitcoin Price Bubble That Never Bursts

Bitcoin price has been on a wild run since October 7 after bouncing off a low of $10,546. On October 21, the digital asset broke its correlation with the stock market and major indices like the S&P 500, cracking $12,000 and $13,000 on the same day.

The current price of BTC is $16,076 after a slight rejection from its two-year high at $16,480. There is certainly a lot of FOMO in the cryptocurrency market right now as Bitcoin continues dominating other coins reaching a 64.6% total market dominance, the highest point since June 2020.

Many investors seem to be worried about Bitcoin’s price as it approaches its all-time high at $20,000 again. Some indicators suggest that the flagship cryptocurrency could be on the verge of a major correction after a 57% price growth over the past two months.

Will FOMO prevent Bitcoin from seeing a pullback?

Timothy Peterson, a veteran trader and Global Macro Manager at Cane Island Alternative Advisors believes Bitcoin is a ‘little bubbly right now’. 

In his tweet, Peterson mentions that Bitcoin is currently in a ‘risk zone’ looking at the Sentiment chart. History has shown that once BTC crosses into this zone, it is bound for an average 20% pullback.  

In this particular scenario, Bitcoin would drop towards $13,000 to re-test this level if this prediction is accurate. 

In the short-term, the most important indicator is the 12-EMA on the daily chart which has been holding as a support level since October 8. A breakdown from this EMA would be significant and the beginning of a potential trend reversal. The 26-EMA would also be a strong support level in that case.

The loss of both EMAs and confirmation of a daily downtrend could potentially drive Bitcoin’s price towards $13,000. However, it’s also worth noting that the digital asset is facing very little resistance to the upside.

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