As the Great Bitcoin Price Rally of 2019 grows even more parabolic, investors and analysts alike are left scrambling for answers.
What’s triggering the mammoth recovery? Will this rally end like the 2017 bubble did? Most importantly, where’s the bitcoin price headed next?
According to eToro Senior Market Analyst Mati Greenspan, the answer might lie in an unlikely place: Disney’s blockbuster animated feature film “Frozen.”
Writing in daily market commentary made available to CCN, Greenspan warned that the speed of the bitcoin price’s breakneck push to $13,000 bore all the “dangerous” hallmarks of “euphoria.”
Didn’t you, he asked, learn anything from the movie “Frozen?”
“Last night’s gain of about 14% is a clear indication of the extreme heat and the change of season. Careful before rejoicing though. If we’ve learned anything from the movie Frozen, euphoria can be dangerous. Remember Olav’s solo song?”
Noting that Google Trends data – specifically a relatively low number of bitcoin-related searches – indicates that greenhorn retail investors are not the ones driving this rally, Greenspan said that seasoned crypto traders are behind the surge.
As evidence, he pointed to CoinLib data which shows that most of the money flowing into bitcoin is coming from tether (USDT), not fiat. This suggests that traders who had parked their holdings in stablecoins during the prolonged bear market are returning to the crypto casino.
A shift from stablecoins to bitcoin can only carry the market so far, however, and traders who bought the dip in late 2018 will likely want to take some profit off the table – eventually, anyway.
Consequently, Greenspan says that euphoric investors should prepare themselves to weather a 20% bitcoin price sell-off, even if they believe the market will ultimately continue to trend higher.
“Though we haven’t seen any of the dramatic hazards that sometimes arise from over-enthusiasm just yet (too much web traffic, congestion in the blockchain, etc.), a massive bull market retracement of 20% or more is always a possibility.”
Because maybe this rally is different. But maybe it’s not.
Click here for a real-time bitcoin price chart.
Last modified: May 20, 2020 12:28 PM