Bollinger Bands Creator Worried about Bitcoin Price Trajectory as Buy Calls Surge

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As an experienced financial analyst, I find the recent surge in social media discussions about Bitcoin and the anticipated approval of the spot Ethereum ETF intriguing. While the increase in buy calls on social media platforms is a positive sign for continued price growth, it’s essential to acknowledge the potential risks involved.

Santiment, a well-known analytics platform, reported an uptick in Bitcoin-related conversations on social media due to the impending decision on the approval of an Ethereum spot ETF. The current market trend shows more buy signals than sell signals, suggesting a rising positive sentiment towards Bitcoin’s price movement.

As an analyst, I’ve observed that an increase in buy call recommendations among traders on social media can be indicative of a bullish outlook for the asset’s continued price growth. From their perspective, these traders view the current pricing as a potential bargain and are eager to enter positions, anticipating a future price surge.

Temporary Sell-off Possible

Although there’s a lot of optimism among social circles regarding Bitcoin, some newer investors may jump on the bandwagon and make purchases based on buy signals, even if they’re not fully convinced about its long-term prospects. Consequently, this behavior could result in temporary sell-offs as Santiment discusses in their recent post.

In an ideal scenario, numerous inexperienced investors might succumb to fear and sell their Bitcoin holdings at this point. A small amount of uncertainty or fear-inducing news could provide the justification for setting a new Bitcoin all-time high (ATH).

As a researcher studying Bitcoin’s market trends, I would explain that the Market Value to Realized Value (MVRV) ratio for Bitcoin currently reaches 153.19%. This metric signifies the comparison between Bitcoin’s current market price and the average cost at which each token was previously purchased by investors.

Having a substantial MVR (Market Value to Realized Value) ratio for Bitcoin implies that the cryptocurrency may be overpriced, with numerous investors currently holding profitable positions. This circumstance can result in heightened selling activity as market participants aim to realize their profits.

According to Coinglass’s figures, Bitcoin’s funding rate across cryptocurrency exchanges hit a peak of 0.018% in the past month. A rising futures funding rate typically signals robust demand for buying contracts (long positions). However, an excessively high level could result in compulsory selling by highly leveraged long position holders, potentially causing price corrections.

Bollinger Bands Creator Concerned

As a researcher studying financial markets and indicators, I’ve come across John Bollinger’s renowned work on the Bollinger Band trading tool. Recently, Bollinger himself has raised some concerns about Bitcoin’s near-term prospects.

Significantly, Bollinger Bands represent standard deviations above and below a moving average, highlighting market volatility and potential price shifts, including possible corrections. Lately, Bollinger observed a two-bar reversal occurring at the upper boundary of these bands – a commonly seen signal of a brief market correction.

According to Bollinger’s assessment, there are some short-term issues worth addressing. However, he maintains a positive outlook regarding Bitcoin’s future growth prospects in the long term.

The analysis of Bollinger Bands becomes particularly significant for Bitcoin now, as it has experienced a notable increase of 12% over the past week and is currently just 6% shy of reaching its maximum price.

Expert here: Rekt Capital, a well-known cryptocurrency analyst, posits that if Bitcoin’s weekly candle ends above $71,500, it could initiate a breakout from the ongoing Re-Accumulation Phase. Nevertheless, based on historical patterns, Bitcoin may continue to hover within this phase for an extended period.

Investors eagerly await the approval of an Ethereum ETF and are closely monitoring whether Bitcoin can break past its all-time high, fueling widespread excitement on social media.

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2024-05-23 12:56