We are witnessing very interesting times in the crypto space of late, as Bitcoin continues to confound analysts, both cynics and supporters, as to why it has suddenly accelerated in the northerly direction with apparently no bears to be found. Crypto Winter was long and brutal, wiping out roughly 80% of the system wide crypto market capitalization, but the general presumption over the past three months is that a formidable bottom formed in late December, and now is the time that Bitcoin and its altcoin brethren will finally bounce back for good.
For the past two months, Bitcoin valuations have invalidated every prediction of doom and gloom that its detractors could throw at it. It blasted through $4,000, which was said to be impermeable, and then waltzed past $5,000, as if its reputation as being a true psychological barrier was as ephemeral as snow in the proverbial desert. BTC rests today at $5,306, with most crypto enthusiasts wondering, as they pop the corks on their champagne bottles, how much higher can Bitcoin go?
There have been no shortage of analysts that have suddenly succumbed to the hubris of the moment and pontificated astronomical figures like $14,000, and then $20,000, and if that was not high enough for you, then how about $72,000? But wait – the “boo birds” at Bloomberg are not buying what they are calling “Emotional Enthusiasm”. They are shouting that more pain is dead ahead, based on their interpretation of their proprietary indicator, the “Bloomberg Galaxy Crypto Index”, which essentially is at its “most overbought since hitting a record last year” in January.
Bloomberg Intelligence analyst Mike McGlone explains:
A highly speculative market rallying on declining volume is not healthy. Typically you need good, strong volume and transactions to indicate an enduring trend. Bulls appear to be grasping at straws or what best fits their more emotional less rational views, positions. The emotional enthusiasm the past week appears too extreme.
The Bloomberg index is heavily weighted by some 86% with the “Big Trio”, i.e., Bitcoin, Ripple, and Ethereum. Each of these giants contributes roughly similar weightings to the index, which has risen some 25% during April alone. BTC and ETH have matched that figure, while XRP appreciated a meager 15%. The fact that the index is in “Overbought” territory is true for any indicator in the “oscillator” genre, when a strong positive trend is in process. It is also important to recognize that this vaunted indicator is only at 20% of its all-time high valuation.
If you are a crypto enthusiast and do not want to partake of the negativity that Bloomberg is peddling, a simple search of the Internet will deliver an abundance of positive analyses to warn the cockles of your heart. Many of the respected analysts in the crypto community go by unique social media monikers, but several of them have gained considerable reputations due to their ability to guess right, when others were guessing wrong. One such fellow is an Ethereum trader and crypto analyst, who goes by the name of ScienceGuy9489.
He achieved some star status some years back by predicting levels and dates, which remarkably came true over time, but before the major bull run in 2017. He disappeared for a time, but he recently shared a few charts and predictions that once again remarkably came true. His major contention is that: “All of the top cryptocurrencies are currently behind, held back by Bitcoin’s current resistance level, and that once it breaks, a new bull run will begin.”
What might that resistance level be?
This analyst zeroes in on $5,260. If Bitcoin can maintain gains past this point, and, again, it is hovering around $5,300 today, then prepare for a major bull run. As for his future Bitcoin target, but without a date attached, try $28,100. He also sees ETH at $2,090, LTC at $650, and Ripple’s XRP ascending to the heavens at $4.
As always, everything with any forecast depends on what happens next in the near term. Crypto supporters see major accumulations by “Whales”, driven by positive developments in the institutional sector, as the catalyst for future growth, as well as $3 billion stashed in stablecoins that are supposedly on the verge of converting to Bitcoin and other tokens. Bloomberg analysts do not see substantial enough trading volumes to justify a major move up, and their trust in the overbought condition of their proprietary index to dictate future market moves is unwavering.
Crypto analysts are at loggerheads. Will the market go up or down, the proverbial question that never goes away until the market speaks? Perhaps, it’s time to listen.