Over the past few days, the prices of crypto assets have slid lower after Bitcoin ended a strong multi-week rally at $7,470, since falling to $6,800 as of the time of this article’s writing. Bears, unfortunately, are expected to push this nascent market lower as a “strong sell signal” was just observed.
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Crypto Market To See Downside Continuation, Key Signal Confirms
Sharing the below chart, a popular crypto trader indicated that Bitcoin is likely on the verge of seeing bearish continuation, pointing to the “strong sell signal” in a death cross and the Tom Demark Sequential (TD Sequential) printing a red 2 candle underneath yesterday’s red 1 candle.
While many are skeptical of the TD Sequential’s accuracy in predicting trends, it has been extremely accurate for Bitcoin over the past few months: 9 candles were seen when BTC bottomed at $6,400 in December 2019 and at the 2020 high of $10,500 in February earlier this year.
The precedent the TD Sequential has set indicates that the medium-term top is in for the crypto market.
To add to the bearish short-term prospects of Bitcoin, NewsBTC reported that the stochastic indicator, a trend-centric technical analysis tool, is suggesting that BTC’s short-term rally is decisively over. The indicator, as a trader observed, has been 88% accurate for Bitcoin since 2018 started.
Long-Term Outlook Still Shaping Bullish
Short-term damage may be sustained to the crypto market, but analysts are convinced that the medium to long-term outlook is anything but bearish.
Per previous reports from NewsBTC, in the April edition of the newsletter “Crypto Trader Digest” BitMEX CEO Arthur Hayes wrote that while Bitcoin has the potential to retest $3,000 yet again if global markets roll over, his year-end price target “remains $20,000.”
As to why he thinks this is the case, he cited that the monetary and fiscal solutions that governments and central banks are enlisting to stave off a recession:
“Everyone knows the shift is upon us, that is why central bankers and politicians will throw all of their tools at this problem. And I will reiterate, that is inflationary because more fiat money will chase a flat to declining supply of real goods and labour. There are only two things to own during the transition to whatever the new system is and that is gold and bitcoin.”
This thought process has been echoed by other former institutional traders.
Mike Novogratz of Galaxy Digital, for instance, said in an interview with CNBC earlier this month that he wholly expects Bitcoin to hit $20,000 by year-end, asserting that the way in which fiat money is being debased is rather bullish for the leading cryptocurrency. He put so much faith in this prediction that he said:
“I have a big Bitcoin position, and I continue to add to it. Partly, because this is an amazing environment for both being long gold and long BTC.”
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Photo by M. B. M. on Unsplash