The short-term gyrations in crypto and stock prices are usually based on sentiment and technicals, while the long-term trends generally follow stronger underlying fundamentals. Therefore, if the fundamentals do not weaken, smart investors view short sharp corrections as a buying opportunity.
Data suggests that large investors, oftentimes dubbed whales, have been accumulating Bitcoin (BTC) since March. Along with them, several new small traders have also been buying Bitcoin and this suggests that retail and high net worth traders believe that Bitcoin will work as a store of value during the next crisis.
Daily cryptocurrency market performance. Source: Coin360
Morgan Stanleys head of emerging markets and chief global strategist Ruchir Sharma believes that inflation is likely to rear its head as early as next year, hence, alternative assets are in demand. Sharma said that about 5% of a portfolio could be in gold and the more adventurous investors could make allocations to Bitcoin and other cryptocurrencies.
While the long-term expectation for Bitcoin price is bullish, do the charts project that a bottom is in place or is another further fall likely in the next few days?
Lets review the charts to find out.
Bitcoin has been stuck in the $9,835–$10,625 range for the past few days, which suggests that both the bulls and the bears are playing it safe and are waiting for the next trending move to start before making large bets.
The long tail on the candlesticks of the past five days shows that the bulls have been buying at lower levels but they have not been able to push the price above the top of the range at $10,625, which suggests that demand dries up at higher levels.
The downsloping 20-day exponential moving average ($10,902) and the relative strength index in the negative zone suggest that bears have the upper hand.
If the bears can sink and close (UTC time) the price below $ ...
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