Is it time to sell your bitcoin?
Bitcoin May Hit a Snag in the Coming Weeks
According to a technical indicator, bitcoin’s potential bull run of the last month may be coming to a sudden end, and trouble is brewing for the world’s number one cryptocurrency. The Global Strength Indicator – a tool designed to measure where bitcoin’s price will arrive in the coming weeks – is allegedly posting a “sell signal” for the first time in more than seven months.
It’s odd that bitcoin would suddenly take a massive nosedive considering the momentum it’s managed to maintain over the past three weeks. January 2020 has been a relatively good month for the cryptocurrency, bringing it well above the $8,000 mark for the first time since last November thanks, in part, to geopolitical strain and the introduction of bitcoin futures options through CME Group.
Bitcoin is widely considered a “safe haven” along the lines of gold and other precious metals in that it can potentially sustain one’s wealth during times of economic strife. With the first part of the month overwrought with worry regarding U.S.-Iran relations, many in the latter country were allegedly stocking up on bitcoin units as a means of protecting themselves should their nation’s infrastructure suffer.
Traders in the U.S. were likely doing the same, which is what many analysts believe caused the sudden surge in bitcoin’s price during the first portion of January. The currency rose from around $6,900 to roughly $7,300 on January 3 and has been on something of a roll ever since.
While tensions eventually eased, the introduction of bitcoin futures and options on those futures through CME Group in Chicago, Illinois got people in a deeper “trading mood,” which is what caused bitcoin to incur more spikes late last week. The currency rose from around $8,000 to approximately $8,500 following the news and was trading for as high as $8,900 by the week’s midway point.
Not Everyone Will Listen
However, the Indicator says that the currency has failed to move beyond the present $9,000 resistance level, which may be why bitcoin is potentially slated to fall in the coming weeks. Matt Maley – an equity strategist in New York at Miller Tabak & Co. – explains:
On a technical basis, it’s getting overbought, and more importantly for political reasons. I think there are just too many political headwinds for a cryptocurrency to get the kind of traction the bulls think it will.
Nevertheless, the news isn’t likely to do much for hodlers or serious traders. With bitcoin on such a run and 2020 slated to become the year of bitcoin given its upcoming soft fork and the halving before that, there are probably a lot of investors who aren’t quite ready to give up their BTC just yet.