Bitcoin (BTC) RSI Levels Close to 90, Trader Expects 25-30% Sell-off In Early 2021

advertisement

On Thursday, December 17, Bitcoin (BTC) made a record rally hitting its new all-time high above $23,500 levels. However, this was soon followed by a whale rush at the exchanges who were set in profit booking.

Advertisement

StormGain

Bitcoin (BTC) is still trading around $23,000 but the technical chart is hinting caution before any fresh buying. Speaking to CNBC’s Trading Nation on Thursday, December 17, Matt Malet, chief market strategist Matt Maley at Miller Tabak said that a 25-30% sell-off is very much likely in early 2021.

Maley points out that the relative-strength-index (RSI) for Bitcoin has reached a very high level. Maley added:

“It’s above 88 [as of Thursday]. That’s not quite up to the 90 level that it reached twice in 2017, but those were followed by declines of 36% and 64%. We’re not quite there yet, … but as the pandemic starts to fade a little bit [and] maybe that liquidity becomes a little less plentiful, this stock could get clobbered like it has many other times in the past.”

Courtesy: CNBC

Maley said that with the continuous stimulus packages rolled-out by the Fed, there’s been excess liquidity in the market. It said that the liquidity has fueled the mega-cap tech rally during summer. Now that the stocks have attained stability, the liquidity is fueling Bitcoin. He said:

“There’s no question it’s been a melt-up, and it could last a little bit longer. I think on a short-term basis it could continue a little bit longer, and I’m very bullish on it on a very long-term basis. But intermediate term, I’m a lot more concerned than I think a lot of other people.”

Maley says that it’s better not to underestimate Bitcoin price volatility by looking at the historical patterns. In the last five years since 2016, BTC has gone through multiple cycles of 20% & 30% corrections.

Advertisement

Cryptocoincoach

“I love it long term, but I think it’s going to be a much deeper sell-off than the 10%-15% ones we’ve seen more recently. I think you’re going to see 25%-30% easily. Again, I don’t think that really starts until early in the new year, but I do think it’s coming soon … based on this overbought condition and the froth that we’ve seen in this asset class in the last week or two,” added Maley.

Bitcoin Hype Nowhere Close to 2017’s

While Bitcoin’s massive rally might have caused traders to consider fresh buys, some bulls suggest that this is just the beginning. Some of the indicators show that the current hype around Bitcoin (BTC) is very subdued and nowhere close to 2017.

Author of the Stock-to-Flow (S2F) model PlanB, noted that Bitcoin has a lot of catching up to do with the S&P 500. He implied that the BTC rally has more steam to it and one can expect $60K ahead.

With the latest rally in Bitcoin (BTC) and Ether (ETH), the total assets under management of the Grayscale have surged past $15 billion. The Grayscale Bitcoin Trust (GBTC) holds close to $13 billion worth of assets while the Grayscale Ethereum Trust (ETHE) holds around $2 billion worth of assets.

To keep track of DeFi updates in real time, check out our DeFi news feed Here.

FBC13



Share on Facebook



Share on Twitter



Share on Linkedin



Share on Telegram

Source link

The post Bitcoin (BTC) RSI Levels Close to 90, Trader Expects 25-30% Sell-off In Early 2021 appeared first on Crypto new media.