- Bitcoin (BTC) cool off, correction in the cards.
- Shapeshift’s Erik Voorhees says bubbles are normal.
At the back of record transaction volumes and ultra-bullish news, Bitcoin (BTC) is one of the top performing assets. All the same, upside momentum is slowing, and BTC could slide back to $7,500, or $5,500.
Bitcoin Price Analysis
Bubbles are normal, says Erik Voorhees,the CEO of the crypto-to-crypto exchange ShapeShift. In a recent interview with Bloomberg TV, the crypto pioneer and one of the first entrepreneurs of Bitcoin notes that most analysts believe that the so-called winter is over. And as such, there are investors who are cautiously siphoning money back into crypto after last year’s deep plunge. He adds:
“We’ve seen four or five of these bubbles at this point, so a lot of this is just cyclical. People wait until they feel the bottom is in, and when they feel like the bear market is over, then they feel comfortable moving back into crypto. That´s probably the biggest reason why this is happening, but often, these things are just a confluence of many individuals making their own decisions.”
Despite what Bitcoin, cryptocurrency, and blockchain represent, asset prices are cyclical in nature. Bitcoin, the most valuable of all digital assets, is no different. After bottoming in the $3,200 range in mid-Dec 2018, BTC prices have surged 2.5 times. However, with supportive fundamentals and widespread use of the coin, analysts are convinced BTC is trading at a discount, even after 2019’s over 150% so far.
After six weeks of near perpendicular upswings, Bitcoin (BTC) bulls are taking a breather. Prices are up 33.8 percent from last week’s close but printing lower lows in smaller time frames.
Even so, the trend is up, and this is normal as prices do correct as accelerants cool off. Thus far, there is a double bar bear reversal pattern from $8,500. Everything else constant, this is a mark of bears and the best move it to exit longs.
Meanwhile, aggressive traders can short with safe stops at $8,500 with first targets at $7,500. From candlestick arrangement, there is an overvaluation since four bars are above the upper BB, favoring bears as a result.
In light of the above, our anchor bar is May-11, wide-ranging, high-volume bull bar—47k against 21k. It is a bull breakout bar. To align our trade plan with May-15 laid out conditions, any dip below May-11 lows will slow down buyers more so if the bar has high volumes exceeding 47k. That will also invalidate our long position as bears take the driving seat with targets of $5,600 in a bear trend continuation phase.
Chart courtesy of Trading View
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