Two indicators point to buying opportunity in Bitcoin; price back at $30,000
By Noemi Jansana / Alejandra Zamora
Date: Friday 20 May 2022
(Sharecast News) - There are new rises the cryptocurrency market, with its two main tokens, Bitcoin and Ethereum, at the top of the price ranges they drew during the week, in a clear consolidation of the strong sales of early May and despite the performance of Wall Street, where there were further falls after Wednesday's session on Thursday, the most bearish since 2020. Satoshi Nakamoto's creation recovers $30,000, resistance that is considered key in the $28,000 to $32,000 range, while Ethereum rises above $2,000.
There is now a date for the event known as Ethereum's 'merger', the time when this blockchain will move to a proof-of-stake model from the current proof-of-work consensus, and this encouraged purchases of the token. Developers revealed that it will occur in August.
From a technical and blockchain data analysis standpoint, the relative strength indicator (RSI) has entered a period that historically preceded long-term investment returns. Rekt Capital shows that when the RSI reached this level before and reversed, including on January 2015, December 2018 and March 2020, it marked a bottom for the market. Last week, market expert Lark Davis indicated that it was oversold, indicating that the buying opportunity is here.
On the other hand, Marcus Sotiriou, analyst at GlobalBlock, explained that data from blockchain analytics firm Glassnode shows that Bitcoin is approaching a region that is below the average cost of all holders on the blockchain. "Previously, when Bitcoin entered this region it presented four buying opportunities," he stated. "Both indicators suggest that cryptocurrency markets may be close to bottoming in this bear market we find ourselves in," the expert added.
In contrast, there is no shortage of warnings from analysts who believe that the digital asset is simply waiting to start its next bloodletting. Popular Bitcoin critic Peter Schiff called this a classic bull trap for investors. In one of his recent Twitter posts, Schiff mentioned the following, "I must admit I'm surprised Bitcoin has held up so well. But don't get cocky #HODLers. The market never gives investors this much time to buy on dips. This is more likely a bullish trap to attract as many buyers as possible before the next major leg down."
He continued by stating: "Rising #food and gasoline prices will put more pressure on Bitcoin prices. That's because groceries and gas stations won't trade their food or fuel for Bitcoins. So if Bitcoin #HODLers want to eat and drive they will soon be forced to sell their precious 'stashes' in order to afford it." This will ultimately mean that Bitcoin could plummet even below $20,000.
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