A fresh report from Bloomberg has caused somewhat of a stir in cryptocurrency circles, after suggesting that selling pressure for the premier cryptocurrency could increase. Consequently, this could lead to a drop in Bitcoin prices.
Bitcoin’s MACD indicator says average daily gains are falling
Specifically, the Bloomberg report references ”technical gauges signaling long-term buying demand for Bitcoin” which are supposedly deteriorating. The report is primarily built on studying Bitcoin’s Moving Average Convergence Divergence (MACD) indicator.
This comes as Bitcoin’s MACD indicator recently logged its first positive returns in as much as seven months. Nevertheless, this indicator has been decreasing since the middle of February, signaling that Bitcoin might be losing steam.
Furthermore, Bloomberg notes that Bitcoin’s average daily gain has decreased between February and the beginning of March. As Bloomberg puts it, this could ”potentially [be] indicating that the [Bitcoin] rally could be running into a wall.”
Although Bitcoin’s average daily gain has dropped over the last month, there are still optimistic signifiers for the price of Bitcoin. For example, February saw Bitcoin experience its first monthly gain since July 2018, sparking hope among some of an impending Bitcoin price level recovery.
With this being said, however, Bitcoin appears to have arrived at another resistance level around the $4,000 level. Failing to breach this barrier could reversely see Bitcoin’s price come under pressure.
The entire industry could risk seeing lower prices, altcoins could partly be to ”blame” for Bitcoin’s decreasing average daily gains
The Bloomberg Intelligence analyst, Mike McGlone, commented on the declining average daily gain reported by Bloomberg. ”The entire industry is ripe to resume a path to lower prices,” McGlone noted, before expanding on the notion:
”Conditions are akin to November, just prior to the collapse. Prices are consolidating within narrowing ranges, with a few sharp bear-market rallies that appear fleeting.”
The senior market analyst at eToro, Mati Greenspan, also commented on the matter, stressing that Bitcoin’s gains of around 20% in the last three months should not be seen as a disappointing performance.
”It’s just that investors are seeing more potential in some of the smaller tokens at the moment,” Greenspan continued, lending further credence to the idea that altcoins may be siphoning some of Bitcoin’s steam.
”As we approach the culmination of the crypto winter, we’re actually seeing some of the altcoins delivering spectacular gains in the last few weeks. We are now in what industry insiders like to call alt-season.”
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.