While Bitcoin is technically down today, it still towers above any all-time highs prior to last week.
As we look at Bitcoin at $52,000 after a high of $58,000, traders are wondering if the coin has further to fall.
If we turn to Omkar Godbole, who routinely analyzes Bitcoin for Coindesk, we find a fairly simple assertion – the rally is “overstretched.”
To be sure, Godbole relies on metrics like the relative strength index (RSI) and a MACD histogram, as well as expert sentiments that Bitcoin may have to endure a 15% correction from its peak. In conventional market activity, Godbole also mentions changes to bond yields as a factor in a Bitcoin correction.
“Technical indicators such as the RSI and Stochastics across numerous chart timeframes are indicating that the crypto asset is overbought, implying that we could soon see a retracement,” says Simon Peters, an analyst at eToro, quoted in Godbole’s coverage, also describing a “bearish divergence” and warning of “weakening upward momentum and potential for trend reversal that could see prices fall.”
Elsewhere, at Cointelegraph, Michael Van De Poppe warns us about the typical correction roller-coaster, which may be, in this case, just headed down.
“Markets never go up in a straight line, and corrections must occur from time to time,” Van De Poppe writes. “This can be considered a ‘reset’ for the market, which reverts back to the mean trendline, and the euphoria fades. At the first stage of a correction, people still expect the corrective move to be a tiny correction, while the sentiment slowly starts to shift. The moment the correction continues, the lower the price goes, the worse the sentiment becomes.”
Keep an eye out for that shift in sentiment he’s talking about, because in the short term, BTC could be in for some red. Sure, great value is in the eye of the beholder, but even for long-term hodlers, it’s better to buy on the dip.
