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Technicals Suggest Massive Correction Is Coming For Bitcoin

  • Bitcoin rallied above $41,000 for the first time since its inception, reaching an all-time high of $41,499 before correcting lower.
  • The leading cryptocurrency’s gains appeared shortly after the European equities reported profits in early dealings, hinting that traders took their cues from a bullish risk-on sentiment.
  • Gains across riskier assets appeared after Democrats won key seats in Senate run-off elections this week in Georgia, giving the blue political party control of both Congress houses.
  • For investors, that means an increase in fiscal stimulus measures to aid Americans through the coronavirus pandemic’s economic aftermath.
  • Bitcoin analysts have predicted that Mr. Biden’s administration’s larger stimulus measure might usher in inflation alongside economic growth. They have projected the cryptocurrency as an anti-inflation set that would rise higher as the U.S. dollar loses its purchasing power over time.
  • However, Bitcoin’s technicals seem to suggest a massive correction ahead. BTC has reached its most overbought levels on all of its longer-timeframe charts, amounting to an unavoidable neutralization led by bear-induced sell-offs.
  • Should a correction occur, BTC/USD would test $40,000 as its interim support while keeping an eye on $36,000 as its primary downside target.
  • Read the full story here.

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