The cryptocurrency markets are again undergoing a significant sell-off, with the great majority of the market deeply in the red.
Although the exact cause of the sell-off remains to be elucidated, some speculate that it likely isn’t over yet and that we could fall down to as low as $8,000 before potentially bouncing back up to a new all-time high.
Bitcoin: Short-Term Bearish
In the last 24-hours, Bitcoin and most altcoins suffered a significant dip, with practically every cryptocurrency down between 5-15% following a sell-off beginning around 7 PM UTC+1. Since then, the global market capitalization of all cryptocurrencies has tumbled from $265 billion, down to $246 billion — a loss of 7.2%
However, this may not be the end of the losses. As it stands, the total market capitalization of all cryptocurrencies (excluding Bitcoin) has fallen to lower than its value at the beginning of May. This is approximately the same time the cryptocurrency market began its ascent, leading to most altcoins posting significant gains.
Currently sitting at $68 billion, the markets are indicating that the bullish trend has now reversed.
Some believe that the recent bearish action was instigated by a recent tweet from AngeloBTC, a market analyst known for his accurate predictions. In the tweet, AngeloBTC mentioned that longs with significant size will be looking to recapitulate to $8,000 — suggesting that big money believes the market will return to this price point.
Despite the recent dip, other cryptocurrency market analysts are confident about the long-term prospects of Bitcoin.
For example, by looking at the relative strength index (RSI) of Bitcoin over the past eight years, a clear trend emerges. During the beginning of each previous Bitcoin bull run, the 12-month RSI has fallen deeply into the oversold territory before gradually moving into the overbought territory as the bull run reaches its apex.
Now, it is clear to see that Bitcoin’s 12-month RSI has followed the same trend seen in the previous two bull runs. Based on the chart provided by PlanB (@100trillionUSD on Twitter), we may be halfway through the third bull run. If this is the case, we can expect the RSI to gradually extend into the overbought category, which should bring significant price gains along with it.
— PlanB (@100trillionUSD) August 29, 2019
However, as always, past performance isn’t an indicator of future success. Because of this, it is wise to be diligent when trading the notoriously volatile cryptocurrency markets.
Do you think Bitcoin will fall towards $8k before a reverse? How do you see the next few months playing out? Drop your thoughts in the comments below!
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