The recent bullish Bitcoin price rally has sent market watchers, investors, and analysts into a frenzy mode especially because the memories of the bullish rally of 2017 that was followed by a very sharp pullback are still fresh in their minds.
This year’s rally is by far more than what was witnessed in 2017 when the bitcoin prices attempted to break the $20,000 ceiling before dropping to below $4,000 in a few months. This year Bitcoin prices went past $24,000.
Interestingly, this happened amid the current economic turmoil that has been caused by the COVID-19 pandemic that has sent most currencies including some cryptocurrencies into depreciation.
Economists and crypto enthusiasts, however, point out that the rapid rise in Bitcoin price was a result of the increased demand among institutional and cooperate investors who have developed an appetite for the digital currency. Tech firms like MicroStrategy, PayPal, and Square invested in Bitcoin. There has also been a surge in the number of asset managers who have converted their portfolios into Bitcoin.
However, with the memories of what took place after the 2017 bullish rally, market watchers are anticipating a pullback once the current rally is over. And this is putting traders/investors in a tough position due to the anxiety of what will happen next. But they can set themselves free from all that by registering with Bitcoin Trader, a completely free, precise, and accurate hands-free Bitcoin trading software that was ranked number one by the US Trading Association in the trading category.
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The relative strength index (RSI) shows that the digital asset is in the overbought region and market watchers and analysts are expecting a pullback.
Maley, an analyst, said, “It’s [the RSI is] above 88 [as of Thursday]. That’s not quite up to the 90 levels that it reached twice in 2017, but those were followed by declines of 36% and 64%.” He also mentioned that “… maybe that liquidity becomes a little less plentiful, this stock could get clobbered like it has many other times in the past,” Pointing to a scenario where when the pandemic ends and there are fewer Bitcoin traders the liquidity of the digital currency would drop.
Tom DeMark, another analyst, said that as a result of the pending upside trend exhaustion, Bitcoin prices would begin a downturn. He went ahead to cite previous instances when this occurred on December 18th, 2017, December 14th, 2018, and June 26th, 2019. True to those observations, the Bitcoin price dropped by about 6% from above $24,200 to about $22,000 on Monday 22nd, December.
But, the $22,500 seems to be providing strong support and the prices have started rising slowly.
For Bitcoin traders and investors, it is a ‘wait-and-see’ moment as some rush to sell off the digital currency to avoid being caught off-guard in case the 2017 pullback scenario repeats itself as those who just bought it pray and hope that the bullish trend continues for a longer time.
Amid the fears, some argue that the 2020 bullish rally is different from that of 2017. They argue that the 2020 rally is being driven by institutional and cooperate adoption of Bitcoin in addition to increased traders as most people stay home due to COVID while in 2017 the rally was mostly attributed to individual speculators.