Wall Street strategy firm Fundstrat Global Advisors is among the mainstream financial industry’s biggest long-term cryptocurrency bulls. However, the firm is advising clients to hold off on buying more bitcoin — at least for right now.
Writing in a recent note to clients, Fundstrat technical strategist Robert Sluymer said that investors seeking to increase their bitcoin holdings should wait for the market to make a clear trend reversal.
“Investors should remain patient and wait for evidence of an improvement in ‘trend’ before increasing exposure,” wrote Sluymer in an excerpt of the note cited in MarketWatch. “A move above the September real and relative highs remains the key resistance/reversal level that will need to be exceeded to signal the early stages of a trend reversal.”
As CCN reported, the bitcoin price has seen record stability in recent days, with BTC’s daily trading range narrowing to levels not seen in more than 17 months and the coin’s price increasingly appearing tethered to $6,550. This decline in volatility correlated with a drop in trading volume, which analysts variously attributed to a decrease in sellers or a reduction in speculative buyers.
Things appeared to be looking up on Tuesday when trading volume spiked above its recent levels and the bitcoin price crept up to $6,679 on Bitfinex. However, the rally stalled heading into Wednesday morning, and by the time of writing, BTC had sunk back to $6,588.
Even so, volume remains strong, and some analysts are optimistic that the market is preparing to make a significant movement, likely to the upside.
For instance, technical analysis from Mati Greenspan, senior market analyst at eToro, suggests that bitcoin is heading into a “classic breakout pattern.” A breakout could propel bitcoin through its 200-day moving average (DMA), which has provided the cryptocurrency with steady resistance over the past several months. This, Greenspan said, could fundamentally reverse trading sentiment in the market from bearish to bullish heading into the last two months of 2018.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 5:09 PM UTC