Bitcoin (BTC) price spiked above $6,800 – short squeeze can support rally
May 11, 2019 @ 15:19 +03:00
No. Way. Bitcoin (BTC) just hours ago moved above $6,700 and even flirted with $6,800 on some crypto exchanges. Although many have been absolutely enamored with this move, some have been left asking: Is the cryptocurrency moving too far too fast? Let’s take a look at some analysis.
Over the past five weeks, Bitcoin has been in a decidedly bullish trend. Ever since the asset broke past the key $4,200 resistance level and its 200-day moving average, some, like Fundstrat’s Tom Lee, have proclaimed that BTC was in a “bull market”.
But few, very few, expected the digital asset class to move as fast it has in the past weeks. In the past month alone, BTC is up by over 50% — gains reminiscent of 2017’s rally. Yet here we are. And interestingly, a move even higher might just be in Bitcoin’s cards.
Technicals and historical price action, not just statistics, corroborate the (heresy) that BTC is currently overvalued in the short run.
A medium-term Fibonacci retracement model, which analyst Filb Filb looked to, shows that Bitcoin has reached the top of its range with the recent move, and could thus settle around $6,500 in the coming days.
To summarize, if historical trends are followed, BTC could very well take a chill pill at $6,700. But if negative funding rates on BitMEX and Bitfinex reach high enough levels, a short squeeze could deem all the aforementioned analysis null.
Analysts Roar As Bitcoin Tops $6,800, Short Squeeze May Sustain Crypto Rally, NewsBTC, May 11