Although Bitcoin is starting the year with renewed optimism, technically things are again suggesting a possible price drop.
Global Strength Indicator indicates a sell signal, the first since the price peaked in June 2019.
In recent weeks, Bitcoin has been unsuccessfully testing the price range at $ 9,000, dropping to $ 7,000 in early January. However, the price again tested the price in January, shortening over $ 9,000 in mid-month.
The signal today is reminiscent of the one in June, where we saw the price go down to $ 7,400.
The price fluctuation we have witnessed since the start of the new year is due to the disappointments of 2019 – the waning optimism following the announcement of Libra and the skepticism of regulators about the security of digital currencies.
“From a technical point of view, the digital currency is in an overbought zone, and there are too many political challenges to push the bitcoin that the bulls are hoping for.” says Matt Maley, investment strategist at Miller Tabak.
Source: Bloomberg Finance L.P.
Graphs: Used with permission of Bloomberg Finance L.P.
Trader Martin Nikolov