An analysis of the latest Bitcoin rally has shown that the price of Bitcoin may be heading towards a downward spiral.
The analysis by Bloomberg has indicated that the recent Bitcoin rally that projected a “long-term buying demand” is slowly cooling down. In turn, massive selling is likely to be witnessed. The Moving Average Convergence Divergence indicator for Bitcoin has recorded a negative vibe around the price of Bitcoin since February 14th. As per the analysis, the negative vibe was witnessed shortly after Bitcoin came out of a 7-month low.
Bloomberg observed that:
The size of Bitcoin’s average daily gain has dropped from February through the start of March, potentially indicating that the rally could be running into a wall… But Bitcoin’s hitting a resistance level of $4,000, and until that level is breached, its price may continue to come under pressure.
Between Feb and March, the Bitcoin rally has been losing momentum with the price of Bitcoin recording a 0.57 percent gain in Feb and losing it in March to record a 0.22 percent gain. This movement has been acknowledged by Mike McGlone, Bloomberg’s intelligence analyst, who noted that this not only affects the Bitcoin rally but the entire cryptocurrency market is likely to resume a downward spiral.
According to McGlone, the movement of the Bitcoin rally resembles the one witnessed in November before the crypto prices started collapsing. Mike added, “Prices are consolidating within narrowing ranges, with a few sharp bear-market rallies that appear fleeting.”
Mati Greenspan, eToro’s senior market analyst has noted that in the last 3 months, the Bitcoin rally has only attracted a 20 percent appreciation to the Bitcoin price. However, for Greenspan, this is because investors are shifting their investments to the altcoins. “We are now in what industry insiders like to call alt-season,” Mati added.
Is the recent Bitcoin rally an indication of a downward spiral or a bullish momentum throughout the year?
Let us know your thoughts in the comments section below,