Bitcoin (BTC) and cryptocurrencies closed January at pretty good levels. Positive entry to 2023 made most crypto investors happy. However, according to one analyst, it is worth paying attention to this bullish sentiment. Because we may face a sharp decline. Here are the details…
Analyst points to bearish possibility for BTC and altcoins
Analyst Crypto Tony talked about the latest situation of Bitcoin and other coins, which is the largest cryptocurrency with its market value. Crypto Tony specifically pointed to the US Dollar Index (DXY) and highlighted the rise of this index. Since the beginning of 2023, DXY has been in a bearish trend. This situation created an inverse correlation with the rise in cryptocurrency prices. Because with the fall of DXY, money inflows to risky assets, especially cryptocurrencies, took place. cryptocoin.com As we have also reported, BTC rose by 43 percent in January.
However, DXY started to rise the other day. This, in turn, could mean that BTC and other altcoins depreciate, given the inverse correlation with cryptocurrencies. At least that’s what Crypto Tony thinks. In a recent tweet, the analyst announced that DXY will rise to 107, ending the momentum in cryptocurrencies. Currently the value of DXY is around 102.
What is expected for Bitcoin in the coming period?
Meanwhile, some analysts are expecting a rise in Bitcoin. As we reported on Kriptokoin.com, famous analysts such as Michael van de Poppe and Rekt Capital suggest that the largest cryptocurrency will first fall and then record local highs. Apart from that, according to CryptoQuant analyst Axel Adler Jr, the realized market cap metric for many assets has increased significantly over the past 20 days due to the bullish trend of the overall cryptocurrency market since the year started.
Taking into account the cost of production of each coin, the metric provides a more accurate picture of the overall health of the market and is considered a better indicator of actual market sentiment towards a cryptocurrency. However, an evaluation of Bitcoin’s realized market cap metric over a single-day average revealed that the coin’s Stochastic RSI (Relative Strength Index) oscillator is in the overbought territory.
Generally, an asset’s RSI oscillator presents overbought conditions when the asset is trading at a relatively high price for an extended period of time, leading investors to believe the asset is overvalued and a correction is needed. In other words, Adler is among those who expect a decline first and then a rise.
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