Overbought Situations in Cryptocurrency History Has Shown Extreme PullbacksMay 11, 2019
Bitcoin has been filled with a lot of problems, yet it has climbed up by 20% over the past 30 days.
Tim Draper projects a lofty bitcoin price when he remarked, “I’m a believer that in four years, something like that, bitcoin will be about a 5% market share of the earth.”
Tim Draper spoke about the best features of Bitcoin being transparency and decentralization. He further added that it was simply a better currency than fiat. Draper purchased 30,000 BTC when the Bitcoin was hovering at $632 per coin.
Draper is envisioning a future where cryptocurrency will be disrupting the venture capital business model.
“I eventually want to have a fund where I take in bitcoin and I fund everybody in bitcoin and they pay their employees and suppliers in bitcoin. And then I pay my investors in bitcoin. Because I would then require no accounting, no legal, no book keeping, no custody. It would all be done.”
He felt that considering every transaction will be recorded in the distributed ledger technology everything will be visible to all the participants. While Tim is a big fan of bitcoin, he is as well open about other kinds of cryptocurrencies. The numbers of the coins will reduce with just the best ones surviving in the long run.
While the market is unpredictable, several analysts are keeping an open mind about cryptocurrencies. The price of the Bitcoin is at $6,379 and it is very far from the Tim Draper projection of $250,000. However, opinions state that if he is correct it captures 5% of the market share of the earth.
A contrary prediction is that the price of Bitcoin might come down due to a pullback. The coin is not too far away from achieving the $6,400 target, but the potential of bullish momentum is weak in the current term.
Anytime the RSI indicator, indicates an overbought situation, history has shown extreme pullbacks. This occurred when Bitcoin touched upon its historical highs. The pullback sentiment is high for $6,400. This will prompt the Bitcoin to take to a 24.95 correction on the downside, which will in turn bring the price of the Bitcoin down to $4,804.
A sharp pull back in the price will not accurately bring the Bitcoin out of its bullish bias. This is due to the strong fundamentals in the market. When coupled with the formation of Golden Cross in the technical chart, the Bitcoin market is now looking extremely bullish.