Bitcoin (BTC) has recently been balancing on the verge of breaking, such volatility in the cryptocurrency market has not been for a long time. Of course, you know this, but the power of this step should not be minimized.
Over the past six weeks, the cryptoactive has made a breakthrough from $ 4,200 to $ 8,300, showing an increase of almost 100%, and at the same time, the Altcoins have achieved significant growth.
Nevertheless, throughout this upturn, analysts have constantly called for correction, trying to find graphics to emphasize that the Bitcoin rally is inappropriate here. Technicians would agree. However, data on the chain show that BTC still looks strong and can continue to grow, avoiding bad news or other bearish catalysts of similar caliber.
Analysts are calling for a Bitcoin correction
Bitcoin's monumental surge in the last couple of months took traders by surprise, there is no doubt about that. Almost no one expected the asset to exceed $ 6,000, not to mention $ 8,000 in early 2019. And yet we are above the level that was a dream just a few months ago. However, some argue that now is the right time to recover the asset.
As previously reported, the last time the Bitcoin chart looked the same as it is now, followed by a strong rollback. Analyst Josh Rager recently noted that during the 2015 recovery, the brutal bear market, which was very similar to the one that was observed in 2018, BTC reached the bottom of about $ 200, accumulating about $ 300 per month, parabolic to get $ 500, and then 40% rollback was observed.
Moreover, the three-day Super Guppy, a key indicator of the long-term trend, did not signal a “purchase” (green) until a pullback followed.
$ BTC – 3D chart Super Guppy
Amazing similarity between the last bear market prior to uptrend
Bitcoin had a similar parabolic pull out of accumulation, followed by a pullback and uptrend
Pic.twitter.com/JABErMhlMq
– Josh Rager ? (@Josh_Rager) May 12, 2019
Sounds familiar? Well, this is because Bitcoin seems to do the same thing effectively, but in a completely different price region. If the history is followed by accurate data, BTC can reach a maximum in the area, drop by about 40% to a minimum of $ 5,000, and then slowly return to the area from $ 6,000 and $ 7,000.
And from there, as trader Horn Khayrs points out, the cryptocurrency market should enter a consolidation period, during which investors will be given a second chance to accumulate Bitcoin.
$ BTC The 7th month consolidation. If this is the case, then it would be true that it was again . pic.twitter.com/c3WwncLyda
– HornHairs ? (@CryptoHornHairs) May 11, 2019
Not so fast, analysts hint
Although this may not happen. First, while the nature of the cryptocurrency market lies in its intense cyclicity — ups and downs, parabolic ups and heartbreaking dips — the historical price behavior does not indicate future results. As Dan Held of the Interchange recently noted, the dynamics in this market are completely different than in 2013, 2017, or even 2018. The situation has changed, to say briefly.
As an example, the industry has some of the largest names in the field of finance and technology. Square – through the Cash App and CEO Jack Dorsey; Fidelity Investments; E * Trade, Bakkt and ErisX are some of the developments in space that make this rally completely different from everything that came before it. Thus, some consider it logical that warnings of a major market correction can be considered controversial.
Chain data can confirm this. Renato Shirakashi, a less well-known, but respected guru of Bitcoin analysts, notes that the coefficient of profit used (SOPR), an indicator that he recently created to predict local maxima and minima, is currently "relatively high", which signals a local peak.
However, Shirakashi notes that this sign, which can mean an increase in pressure from sellers, "usually pushes prices down."
Everyone is correct right now. Why?
(thread)– Renato Shirakashi (@renato_shira) May 15, 2019
But as the market continues to grow, it assumes that the demand for BTC is growing, thereby absorbing the increase in supply in the market.
Moreover, the average life expectancy of unspent output does not change, which means that HODLers continue to HODL, and that the only BTC currently distributed on cryptocurrency exchanges are those that were recently mined. As Shirakashi explains:
“If we look at the average life expectancy of the results, we will see that it does not change. This means that old coins do not fall into the auction. It seems that old people do not want to sell. This limits our deliveries to negotiable coins. ”
And, most importantly, the demand from the retail audience continues to increase and at the same time significantly increase. As it was reported on Wednesday, the terms “ Coinbase ” and “ Blockchain ” began to appear in the Apple App Store, which probably belong to two popular Bitcoin wallets .
Not only does FOMO materialize in downloads for key cryptocurrency applications, but also clicks on cryptocurrency related sites. According to the latest Google Trends data , Bitcoin searches in the USA have tripled in the last three weeks.
This does not bode well for correction, since “an increase in demand with a limited supply of coins” makes such a move almost unbelievable.
Publication date 20/05/2019
Share this material on social networks and leave your opinion in the comments below.
