BTC expects a sideways movement or even further down correction according to an analyst that we are reading more about today in our Bitcoin news.
The 100% rally of the cryptocurrency in the past two months is now closing according to Florian Grummes of Midas Touch Consulting. In his reports, he said that the BTC/USD pair expects to undergo a longer correction noting that despite the price euphoria which boosted the price more than 400 percent from the March crash, the pair still sits tight in an overbought situation.
In retrospect, there were a few technical indicators that measure the assets’ momentum against the running trends which show BTC is in an overbought territory which usually translates into the traders’ bid for benchmark crypto that stands higher than the cost, signified by the neutral momentum indicator.
For example, the Stochastic Oscillator which is called the “accurate buy and sell indicator” shows that BTC is in overbought territory on the charts. A similar metric, the Relative Strength Indicator reflects that the cryptocurrency should not be handled at the current prices. Mr. Grummes noted that BTC remains bullish on the weekly timeframe pointing to a long-term uptrend that will most likely continue in 2021.
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With that said, the analyst said that the cryptocurrency will correct lower or will run sideways in order to neutralize the overbought signals but after that, it could resume the uptrend:
“One must bring along nerves made of steel too in order to be able to bear and get through possible huge pullbacks in the magnitude of 30-45% from current price levels.”
Grummes measured Bitcoin’s correction longevity based on the seasonal fractals and according to the data, the last two Decembers saw the asset facing strong selling pressure from the bears, which lead the pair to its seasonal bottom rates. This time, however, the signs were those of topping out that could remain until the spring sessions:
“Frequently, bitcoin’s bull run has been running out of steam at the beginning or mid of December. Either it followed a sharp corrective move and/or a sideways consolidation lasting several months.”
With that said, the analyst noted that BTC expects a sideways movement in 2021 as well and that there are still chances to form a new high above $20,000 as the psychological upside target but with smaller chances of holding the flipped level as support.
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