As an experienced analyst, I’ve seen my fair share of market fluctuations and trends. Based on the available information and data points presented in this article, I believe Bitcoin is currently overvalued.
The price of Bitcoin has surged past $63,000 on June 30, marking a new trend upward. This uptick in value has generated considerable discussion, despite growing momentum. However, some investors express reservations, questioning whether the coin’s current value may be inflated.
Analyst: Bitcoin Is Overvalued, Here’s Why
One analysis piece on X observes that according to one expert, the value of the coin could be due for a pause in its growth, following the 18% decline observed in June. The analyst’s prediction is based on various considerations, such as the passage of time, the current number of active Bitcoin addresses, and the hash rate.
From my perspective as a crypto investor, the analyst’s findings cast some doubt on the continued uptrend, leaving those hoping for further bullish momentum feeling disheartened. Currently, Bitcoin has retreated to a familiar multi-week range with resistance at its all-time high and support around $56,800 – a level that was established back in May.
As an analyst examining price action, I can observe that the market is currently under the control of buyers. Although there have been lower lows, such as those seen in May when the price dipped below $60,000, the bullish trend still holds from a top-down perspective.
Significantly, prices have been contained within a bull flag since the price increases in Q1 2024. Yet, the lack of buyer confirmation during mid-March is hindering the continued upward trend.
The daily chart has prevented buyers from surpassing the $74,000 mark, while $72,000 serves as a significant selling point. In the near future, the market direction might change if prices manage to push above $66,000 with increased trading activity backing this movement.
Germany Selling As BTC Gains Versus M1 Money Supply In The United States
Adding to the growing apprehensions, the German government recently moved 1,500 Bitcoin, equivalent to around $94 million, on July 1. According to Lookonchain, approximately 400 BTC from this transfer were forwarded to three cryptocurrency exchanges – Bitstamp among them.
As a crypto investor, I can interpret this situation in the following way: When I see large transactions involving significant amounts of Bitcoin being sent to exchanges from an address linked to the German government, it gives me reason to believe that they might be looking to sell. This is a bearish sign for me, as it suggests a potential increase in supply on the market. The fact that this address currently holds over 44,000 BTC, worth more than $2.5 billion at current spot rates, makes this transaction even more noteworthy.
As a researcher studying the cryptocurrency market, I’ve noticed that despite the ongoing concerns, some analysts remain optimistic about Bitcoin (BTC). One such analyst has drawn attention to the correlation between the United States M1 money supply and BTC prices. According to their analysis, Bitcoin is gearing up for significant price increases.
Based on the graph’s analysis, the argument is that Bitcoin’s peak value hasn’t surpassed its previous record against the US M1 money supply for more than six years.
Given the significant increase in Bitcoin’s price trend since the middle of 2023, it’s reasonable to anticipate that bulls will regain control, potentially driving the cryptocurrency to new record-breaking heights.
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2024-07-02 01:16