Bhushan Akolkar
It’s been a brutal weekend for the crypto market which has witnessed severe liquidations following the U.S. inflation numbers released last Friday. As of press time, Bitcoin (BTC) is trading 6.57% down at a price of $25,673 hitting its 18-month low. On the weekly chart, Bitcoin has corrected more than 18%.
However, some technical indicators suggest that it might be the right time to add BTC, especially for the long-term holders. Bitcoin’s relative-strength-index (RSI) has touched the oversold territory for the first time since 2018, says crypto analyst Lark Davis.
#bitcoin weekly RSI officially touches into oversold territory!
First time since the depths of the 2018 bear market! pic.twitter.com/pj56PNnpMf
— Lark Davis (@TheCryptoLark) June 13, 2022
Another interesting point that Davis points out is that the volume has been very less in today’s BTC price crash to $25,000. If the buyers step in, we can see a reversal from here anytime. Unfortunately, the buyer participation seems subdued as of now.
Volume is super thin on this sell off, buyers not stepping up here… #bitcoin pic.twitter.com/g1W8Zqb3XF
— Lark Davis (@TheCryptoLark) June 13, 2022
Just as the U.S. released its inflation numbers last Friday, Bitcoin critic and gold advocate – Peter Schiff – predicted a sharp fall in BTC. He advises investors not to buy the dips. Schiff wrote:
This could be a rough weekend for #crypto. Bitcoin looks poised to crash to $20K and #Ethereum to $1K. If so, the entire market cap of nearly 20K digital tokens would sink below $800 billion, from nearly $3 trillion at its peak. Don’t buy this dip. You’ll lose a lot more money.
What Shall Bitcoin Investors Do?
The crypto market is highly volatile and unpredictable at this stage. Furthermore, it has corrected faster than the U.S. equity market. With this hot inflation in the U.S, the Federal Reserve is likely to initiate quick actions with interest rate hikes.
But this also poses the risk of the U.S. slipping into a recession. In this case, we might see a further sell-off in the U.S. equity which might put selling pressure on crypto as well. Antoni Trenchev, co-founder and managing partner of crypto lender Nexo said:
“Cryptos remain at the mercy of the Fed and stuck in a merry dance with the Nasdaq and other risk assets. We’re hearing Bitcoin forecasts in the mid-teen and single-digit thousands which tells you the type of macro environment crypto is facing for the first time—and the levels of fear.”
But some analysts feel that this could be a good time to stack some more Sats, but with caution. Rick Bensignor, president of Bensignor Investment Strategies and a former strategist at Morgan Stanley said:
“Typically, I’d suggest being a buyer here. But if you do get long, perhaps think about doing so with either a long call spread or short put spread to limit risk. If this dives, there’s no reliable support nearby.”
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
