Bitcoin Price Rally Could be on Last Legs, Bloomberg Analyst Warns
Bloomberg technical analysts are warning that the Bitcoin price's latest recovery may be on its last legs. | Source: Shutterstock
A key market indicator shows that the Bitcoin price rally may be losing steam.
According to Bloomberg, “Bitcoin’s Moving Average Convergence Divergence indicator has been steadily falling since mid-February.” MACD is a commonly used metric for technical analysis. When it diverges from the symbol, it means that a trend may be over with.
Watch out Bitcoin Bears – MACD Isn’t Everything
Let’s keep in mind, however, that this is crypto. Old world tools like MACD and EMA only go so far here.
Long-term charting suggests that Bitcoin may be overbought, but sellers may nevertheless back away from the market if demand depresses the price. People holding at this point in the game don’t have a lot to lose by waiting a while longer. One key group that will always sell are certain parts of the mining industry, but they are increasingly developing strategies to deal with lengthy bear markets.
Bloomberg analyst Mike McGlone thinks differently. He believes the market is preparing for yet another significant downturn, similar to the one that saw Bitcoin drop by 50% from October to December.
“Conditions are akin to November, just prior to the collapse. Prices are consolidating within narrowing ranges, with a few sharp bear-market rallies that appear fleeting.”
Altcoin Boom Times?
EToro Senior Market Analyst Mati Greenspan commented that the money is actually just moving further down the market cap list. He said:
“As we approach the culmination of the crypto winter, we’re actually seeing some of the altcoins delivering spectacular gains in the last few weeks. We are now in what industry insiders like to call alt-season.”
Bitcoin’s “gains” have been sluggish compared to Litecoin and Ether, Bloomberg concludes. Litecoin is perhaps the breakout story of the year, charting up from under $30 to its present-state of $50 – an actual gain. Adjusting for price deflation, it would be in the hundreds during better times.
Is the so-called rally over? This reporter, for one, is never willing to say as much about Bitcoin. We have to take the long view, in the end. This wasn’t a rally to begin with, from that perspective. It was more business as usual. If I have $1 today, and it loses 50% value tonight, then regains 10% tomorrow, was it rallying or am I just slightly less in the hole?
Wait, Didn’t Analysts Say that Last Month?
Perhaps the wisdom to draw from the MACD is that people targeting the $4,000 region might want to consider cooling their jets. Those prices might not be available much longer. For buyers, a waiting period might be beneficial as well, to let the whales play out the last of the “rally” game.
It’s worth noting that just last month, analysts called the “end” to the rally. It continued for another $500 roughly. If the same thing happens this time, the continuation might be longer.
But again, this is crypto.