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There has been an aura of hope and optimism in the crypto space over the last few weeks because of the rising prices of Bitcoin, the largest cryptocurrency out there. However, Bloomberg’s Intelligence analyst Mike McGlone revealed an interesting and gloomy statistic that has once again made the entire crypto community anxious.
According to the report by McGlone, Bitcoin is at its most overbought level since back in December 2017. That was the time right before Bitcoin and the entire crypto market’s infamous fall. Before that, Bitcoin’s price was at its historical high, nearing $20,000.
Currently, Bitcoin is having its best month in weeks. Having rallied up 20% and surpassing the $5,000 mark since last November. The increase in value has made the entire community hopeful that Bitcoin and other cryptocurrencies like it have bottomed out finally and the bear market is finally coming to an end. Ever since December 2017, Bitcoin’s value kept plummeting further and further down. Making even the most die-hard fans anxious.
While the crypto space has seen a tremendous amount of development outside of cryptocurrencies, the lowering prices had forced many companies to shut down and close shop. With the rising prices, people were hopeful that Bitcoin was showing signs of a bullish run once again. However, the report by Bloomberg‘s Mike McGlone has jolted the community back into reality from the realm of dreams.
The report indicates that the current mini-surge has pushed Bitcoin into overbought territory. The report cites the GTI Global Strength Indicator (GSI), a price strength indicator that compares individual upward or downward movements of successive closing prices. Talking about the possible reasons for this hike in Bitcoin prices, the report argues, “The market got so compressed, volatility was so low, it just went poof! It broke out. It was released from the cage,” said Bloomberg Intelligence analyst Mike McGlone. “Now it’s a question of duration and I suspect when you have such a massive bubble, you’ll always have an overhang of people who need to sell.”
The report does provide an argument for the other more optimistic possibility. According to David Tawil, president of crypto hedge fund ProChain Capital, who was quoted in the report:
“It’s nice to see a positive move as opposed to a negative move, certainly. But at the same time, for investor purposes, it’s not a particularly comforting move. Certainly, an investor would much rather see a gradual rise with constant floors in terms of downside being established, as opposed to a very, very quick run-up. It could easily be easy come, easy go.”
Nobody knows where the Bitcoin is headed next. Supporters were sure that Bitcoin was on the cusp of another bullish run. However, investors can’t ignore the statistics put forth by Bloomberg’s report.