According to Katie Stockton, founder and analyst at global financial markets research firm Fairlead Strategies, Bitcoin’s 33% rally in October sent the cryptocurrency into short-term overbought territory, signaling a countertrend that could lead to volatile price action in the future.
In a note shared with clients on Sunday, Stockton said: bitcoin After the flashing of a DeMARK “13” signal for Bitcoin, he advised them to delay buying Bitcoin for the next two weeks.
The aforementioned signal indicates a two-week consolidation phase for Bitcoin, which could include a pullback to the support level around $48,000. The price forecast represents 16% short-term downside potential from current levels.
According to Stockton, the DeMARK sell signal was also confirmed by the drop from overbought levels on the daily stochastic indicator. But the long-term uptrend in Bitcoin remains intact, causing Stockton to view any emerging consolidation as “temporary”. “We see any consolidation that occurs as temporary,” Stockton said. used the phrases.
“We can compare this signal to the one generated in January,” Stockton said. used the phrases. Back in January, the same countertrend signal emerged just before Bitcoin dropped 25% from around $40,000 to around $30,000. This consolidation phase lasted for about three weeks before Bitcoin continued to record all-time highs for three consecutive months.
Besides, after Bitcoin definitively passed the $52,900 resistance level last week, Stockton adds that the cryptocurrency is targeting its previous all-time high of around $65,000. But in the short term, it does not go without warning investors.
Despite the countertrend signal triggered on Sunday, Bitcoin continued to rise, jumping around 2% in Monday’s trading session.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.