Some analysts think Bitcoin is poised to crash as it started showing some signs of weakness after the crazy rally from $11,000 to $24,000. However, others don’t think that this is the case as we can see in today’s Bitcoin news.
The BTC drop suggests that a stronger move lower is on the way but on a near-term basis, not everyone is convinced that BTC is done rallying yet. BTC started showing signs of weakness after the crazy rally from $11,000 to $24,000 and now it is trading for $22,600 which marks a drop of a few percent since the previously hit highs. The drop made some analysts think that BTC is poised to crash, well at least one analyst said:
“BTC – 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?”
As the charts show, the Stochastic Relative Strength Index started peaking after a strong move higher and this suggests that bitcoin’s uptrend momentum lost some steam and could revert to the downside because of it. But not all analysts are convinced that a drop is likely.
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The charts also show that BTC may catch a bid in the $22,300 region at which point it will bounce higher above $24,000. As the chart shows, the level was crucial for the bulls over the past few days and BTC managed to hold the $22,300 support level that could suggest a reversion of the upside is likely to happen.
Historical supports are acting as support once again so it means that BTC has room to shoot higher as its fundamentals remain strong. Also, the passing of the recent US Stimulus could push the market higher. The US Senate voted in favor of the bill that will see the $900 billion worth of stimulus poured into the economy as a result of the pandemic. Many think that this will have positive effects on the stock market which should help BTC move higher as a risk asset. Brendan Blumer, the co-founder of Block.one said:
“Looking at the increase of USD supply in the last 12 months and it’s the trajectory for the next 12, it’s easy to see that Bitcoin’s 2020 price increase isn’t as substantial as it looks, and the continued entry of institutions and sovereigns will dwarf anything to date.”
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