The news that there is a date for the event known as the ‘merger’ of Ethereum, the moment in which this chain of blocks will go to a proof-of-stake model from the current proof-of-work consensus, has encouraged purchases in the token. . The developers have revealed that it will be produced in August.
From a blockchain data analysis and technical standpoint, the Relative Strength Indicator (RSI) has entered a period that has historically preceded long-term investment returns. Rekt Capital shows that when the RSI has hit this level before and reversed, including January 2015, December 2018 and March 2020, it has marked a bottom for the market. Last week we already reported that market expert Lark Davis indicated that he was oversold, which indicates that the buying opportunity is there.
On the other hand, Marcus Sotiriou, an analyst at GlobalBlock, explains data from on-chain 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 enters this region it has presented four buying opportunities,” he explains. “Both indicators suggest that cryptocurrency markets could be close to bottoming out in this bear market that we find ourselves in,” adds the expert.
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 calls this a classic bull trap for investors. In one of his recent Twitter posts, Schiff mentions: “I must admit I’m surprised bitcoin has held up so well. But don’t get cocky #HODLers. The market never gives investors that much time to buy dips. It’s More likely this is a bull trap to lure in as many buyers as possible before the next major leg down.”
He continues: “Rising #grocery and gas prices will put more pressure on bitcoin prices. That’s because groceries and gas stations won’t exchange their food or fuel for bitcoins. So if Bitcoin #HODLers they want to eat and drive they will soon be forced to sell their precious ‘stash’ in order to afford it.” This will ultimately mean that bitcoin could crash even below $20,000.
At the beginning of 2022, the correlation coefficient between Bitcoin and the Nasdaq index marked the highest figure since 2011. Since then, market analysts understand that cryptocurrencies are still part of the technological ecosystem. The digital currency with the highest capitalization rises 4%. Major cryptocurrencies up as much as 5% led by Solana and BNB.
When the economic cycle is expansionary and large companies grow and improve their profits, share prices grow and the market trend is consistently bullish. On the other hand, when the crisis arrives, interest rates rise, inflation accelerates and the probability of creating a recession increases, then the technological ones fall. And if bitcoin is correlated at a high level, so will it.
Therefore, for now, the short and medium-term statistics show that bitcoin and other cryptocurrencies may not be the definitive refuge of value as proposed by the hard core of the crypto community, but that they would be procyclical assets that simply rise to a greater or lesser extent than technology stocks.
Bitcoin resists
In a context of rising rates, Bitcoin resists but there is no lack of warnings from analysts who believe that the digital asset is simply waiting to start its next bloodletting. Popular bitcoin critic Peter Schiff calls this a classic bull trap for investors. In one of his recent Twitter posts, Schiff mentioned: “I must admit I’m surprised bitcoin has held up so well. But don’t get cocky #HODLers. The market never gives investors that much time to buy dips. This is more likely a bull trap to attract as many buyers as possible before the next major leg down.”
And he continues: “The increase in the prices of food and gasoline will put more pressure on bitcoin prices. That’s because groceries and gas stations won’t exchange your food or fuel for bitcoins. So if Bitcoin holders want to eat and drive they will soon be forced to sell their precious ‘stash’ in order to afford it.” This will ultimately mean that bitcoin could crash even below $20,000.
According to César Nuez, an analyst at Bolsamanía, the charts point to a bleak outlook: “The double turn drawn around US$64,000 could be giving us the shape of a double top. This formation has terrifying consequences for the coming months and that is that the figure’s drop target could be quietly at $8,000.”
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Source: Ambito
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