‘Emotional’ Bitcoin Bulls are ‘Grasping At Straws’, Claims Bloomberg Analyst

A recent article in Bloomberg paints a less optimistic future of the crypto markets than you might typically find this week.

Vildana Hajric reports that the GTI Global Strength Indicator of the Bloomberg Crypto Index, which tracks significant cryptos, has the same trends which led to its previous peak in January 2018. The index (and the price of major cryptocurrencies like Bitcoin and Ethereum) dropped over 65% after that.

Analyst Calls Bullsh** on April Fool’s Day Run

According to analyst Mike McGlone, the current “bull” trend is suspicious at its very best. He says that exchange volumes and transactions aren’t what we should expect in a bull market.

A highly speculative market rallying on declining volume is not healthy. Typically you need good, strong volume and transactions to indicate an enduring trend. Bulls appear to be grasping at straws or what best fits their more emotional less rational views, positions. The emotional enthusiasm the past week appears too extreme.

The Bitcoin price has risen more than $1,000 since April 1st. The April Fool’s Day run, we might call it in historical terms, no one’s overly sure what sparked the rally. Before that, Bitcoin had traded within several tight ranges, all the way down into the high $2,000s at some points, for months. Bulls have seized the opportunity to celebrate on social media, and the price of other major cryptos have experienced corresponding gains, or, in the case of Bitcoin Cash and Litecoin, seized much more substantial percentage gains.

Crypto trading platforms overcharging fees when compared to stock and forex trading platforms, an economist’s research has revealed. | Source: Shutterstock

Bitcoin has been surging in April, charting a new 2019 high after the first quarter of the year. | Source: Shutterstock

“Emotional enthusiasm” is one way to put it. Fear of missing out (FOMO) is probably another driving force in the buy orders placed over the past nine days. People who had been waiting for lower prices were likely spurred into action when they saw the Bitcoin price take off out of nowhere. Bitcoin shorts were high in the middle of March, but obviously, millions in short calls were liquidated when the bulls took off.

60+% Drop Incoming?

According to CoinMarketCap.com, total volume in the Bitcoin market over the past 24 hours at press time was just over $13 billion. On March 13th, it was close to $10 billion. However, during the most bullish month on record, January 2018, when Bitcoin eventually reached a crescendo of nearly $20,000 across most markets, volume ranged from $11 billion to over $23 billion. Volumes were higher as the price began to drop, for obvious reasons.

There are even more markets now. The addition of stablecoin markets should contribute to increased trading figures.

The report may be a sobering warning to those who are expecting loads of new money to enter the market and float the unit price higher and higher. However, the resistance to fantastic run-ups and the realistic nature of the gains may be an indicator of a healthy market.

Or, as McGlone suggests, the technical indicators could be on the nose: we’ll be entering a sell-off before the bulls know what hit them. If that sell-off is anything like the last time the same technical indicator was applied, it could mean a drop to the mid or low $2,000 level for Bitcoin, with corresponding drops across most of the top 10.

This post was last modified on 10/04/2019 09:38

Share
P. H. Madore @bitillionaire

P. H. Madore has written for CCN since 2014 and is currently Head of Crypto. Please send breaking news tips or requests for investigation to paul.madore@ccn.com. His website is http://phm.link

Show comments

News Tip?

tip (at) ccn.com

Advertisement


About Us

CCN Markets is a financial news site reporting on US Markets and Cryptocurrencies. Op-eds and opinions should not be attributed to CCN Markets. Journalists on CCN Markets follow a strict ethical code that you can find here. You can contact us here. You can read more about us here.