Bitcoin Technical Indicator Flashes Sell Signal, Suggests Further BTC/USD Price Downside
Bitcoin is currently trading at $5,248 with 24-hours losses of 0.95 percent, as per Coinmarketcap. While BTC/USD is trading at around $5,150, there is still a 6 percent difference between the price it is trading on Bitfinex at $5,483, at the time of writing.
It’s been now 5 days since the leading cryptocurrency took a drop from around $5,505 to $5,075 after the Bitfinex and Tether drama unfolded. Since then BTC is oscillating between $5,200 and $5,100.
However, according to Bloomberg Bitcoin price’s latest rally might be losing its steam as its technical indicator GTI Vera Convergence Divergence indicator that is used by investors to detect trend reversals is showing its first sell signal since mid-March. This shift could suggest that further downside may be ahead.
But according to Mati Greenspan, senior analysts at eToro “Bitcoin rarely reacts to overbought/oversold technical indicators” and moreover, given the fact the oversold signal was flashed in March as well but we didn’t see the price falling then, it can't be said that it would drop this time.
In 2017, after going to $20,000, Bitcoin tumbled about 84 percent when in December last year it reached $3,200. However, moving this year, the flagship cryptocurrency almost surged 50 percent to its highest levels of the year at above $5,600.
“When Bitcoin jumped significantly a few weeks ago, the volume was big enough to push up through major resistance levels into a potentially new trading range,” George McDonaugh, chief executive officer at London-based blockchain investment company KR1 Plc, told Bloomberg.
The Bitfinex and Tether fiasco has caused the uncertainty in the market as he further added “Current movements are natural market cycles within a trading range and it’s just the market searching out the lower bounds.”
However, per Greenspan, “The Tether debate does seem to have some people nervous, but not about Bitcoin. The most likely reaction would be for investors to swap their Tether for Bitcoin.”
Additionally, Bitcoin has hit the 61.8 percent Fibonacci resistant level that typically signals support and resistance points, and dropped lower. Fibonacci analysis is based on the theory that price fall or rise by certain percentages after reaching historic lows or highs. This means, in order to break the resistance line of $5,679, Bitcoin could need a positive external factor.
As the top cryptocurrency fell last week, altcoins did as well and are still in the red. Top cryptos that were down by 2 to 5 percent has starting to show signs of green but has the total market cap stuck around $170 billion. This has driven the BTC dominance up.
On April 1st, Bitcoin dominance has been at 50.13 percent which has now gone up to 54.8 percent. Crypto trader and analyst, Josh Rager says the rising BTC dominance is a sign of why “altcoins are bleeding.”
According to TradingView, BTC dominance is at 58.12 percent and continues to push up to match the 58.64 percent high during the December lows as the cryptocurrency market caps continue to hover between $140 billion to $180 billion in the last month.
“As the Bitcoin dominance continues to rise, don't expect many alts to make rapid gains/if any at all.”
The 55 EMA will cross the 200 EMA. This is inevitable
These events are not simply BULLISH though
It is the reaction by Price when this occurs that determines its effect (Bullish/Bearish) and that effect usually is long-standing pic.twitter.com/8mPpYRECvU
— Mr. Anderson (@TrueCrypto28) April 30, 2019
Which comes first for $BTC ?
— Bagsy (@imBagsy) April 28, 2019
Live Bitcoin (BTC) Price:
1 BTC/USD =$58,037.4133 change ~ -0.78%