Bloomberg: Bitcoin (BTC) Indicator Flashes Warning, Signals Leading Crypto Overbought
A technical gauge that looks at intraday volatility suggests Bitcoin is in overbought territory.
The GTI Global Strength Indicator flashed the warning as the price of BTC climbed above $5,000 earlier this week, according to Bloomberg. The tool showed Bitcoin at its most overbought level since its meteoric climb to more than $19,000 back in December of 2017.
Bloomberg Intelligence analyst Mike McGlone says he’s looking to see if traders are tempted to sell or plan to hodl after the recent rally.
“The market got so compressed, volatility was so low, it just went poof! It broke out. It was released from the cage. 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.”
David Tawil, president of crypto hedge fund ProChain Capital, says he’s also watching for a correction.
“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 easily be easy come, easy go.”
Ajeet Khurana, CEO of cryptocurrency exchange Zebpay, says market sentiment is sitting on a razor thin wall.
“We are at a unique point when the bets in the Bitcoin market are almost evenly split, with half of the money expecting an imminent doubling of price, and the other half a halving.”
New analysis from the historically bullish research firm Fundstrat cites BTC’s recent rise above its 200-day moving average as a key factor to watch. The firm’s analysis shows that when Bitcoin trades above its 200-day, the average returns over a six-month period are 193%.
Meanwhile, crypto investor and analyst Josh Rager is comparing Bitcoin’s current path to its boom and bust cycle back in 2014-2015. If history rhymes, Bitcoin would continue to trade sideways and begin to climb this summer.
$BTC Accumulation Pattern
It took Bitcoin 216 days for accumulation from bottom to spring in 2015
If this were accumulation, this week's $1000 candle would be the exact middle of 216 accumulation days and would end on July 19th, 2019
Pure speculation but fun to compare pic.twitter.com/I6YfHiqwdW
— Josh Rager 📈 (@Josh_Rager) April 5, 2019
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