Top analyst, @MagicPoopCannon, is cautious regarding the recent rally of Bitcoin (BTC) to $10k.
He cites that Bitcoin’s daily RSI as being overbought.
He points out that the stock market is not out of the woods yet and any move down will impact BTC and other cryptos.
Additionally, he puts forth one scenario where BTC and Crypto will thrive due to investors losing faith in the global fiat systems.
The Bitcoin (BTC) halving event is now 3 days away and interest in the King of Crypto and the industry, in general, has risen in the past few days. Clear proof of a renewed interest in Bitcoin can be seen in BTC recently testing $10,000 and trading at $9,980 at the time of writing this. Additionally, the industry got a massive boost only yesterday when legendary Paul Tudor Jones, let the trading community know, that he too was buying Bitcoin.
Bitcoin and Crypto Could Hit New Highs if Fiat Fails
Mr. Jones’ key reason for deciding to invest in Bitcoin, is his forecast of possible inflation brought about by the Fed and other global central banks, constantly printing fiat to cushion against the economic effects of COVID19.
His views are mirrored by top Bitcoin and Crypto analysis, @MagicPoopCannon in his latest Tradingview analysis of BTC. In the detailed post, Magic postulates one scenario where Bitcoin and Crypto are propelled to new highs due to investors losing confidence in the traditional fiat systems. His statement putting forth the idea can be found below.
..there’s one thing that I think can really propel crypto to new heights at this point — and that’s a loss of confidence in traditional fiat currency systems. Given the extraordinary worldwide debt crises, and the absolutely reckless monetary expansions of global central banks, we could see a loss of confidence in fiat soon enough.
Daily RSI is Overbought
Regarding technical indicators, Magic was quick to comment that Bitcoin’s daily RSI was massively overbought and could result in a situation where BTC takes a dip.
..it’s probably wise to exercise caution here. You can see that the RSI is in overbought territory. So, there’s a chance that BTC could turn back to the downside…
Wise to Keep an Eye on the Stock Markets
Additionally, Magic highlighted that Bitcoin was not yet immune to the effects of a collapsing stock market. In his analysis, he advised that it would be wise to keep an eye out for any pending crash in the traditional markets.
My primary concern is the state of the equity markets. I’m worried that the stock market has become irrationally exuberant in the recent rally, and I think it’s likely that we could see another retest of the lows, and potentially even lower lows than what we saw in the past few months.
So, if the equity markets turn lower, and we see a continuation of the recession, I think it would be practically guaranteed that crypto would continue to get punished.