Popular cryptocurrency analyst Tone Vays has argued that the price of bitcoin will keep on trading between $6,000 and $10,000 for the rest of the year, pointing to its correlation to the stock market and technical indicators to back up his prediction.
In the latest episode of his YouTube series, Trading Bitcoin, Vays focused on bitcoin’s correlation with the stock market, pointing to various scenarios in which the price of BTC dropped along with equities markets.
Binance’s research division has, in fact, shown that there was a “moderate” correlation between the flagship cryptocurrency’s price and equities markets, despite analysts claiming the cryptocurrency would decouple from equities over a number of factors.
Equities markets have been struggling to keep on rising as a new rise in coronavirus cases has been scaring investors, and some states in the U.S. are now halting their reopening process. What’s more, weekly jobless claims keep being worse than what experts forecasted.
Vays said:
I have no reason to walk away from my prediction early in the year that Bitcoin is going to get stuck between $6,000 and $10,000 for the majority of this year.
The cryptocurrency analysts also pointed to Bitcoin’s daily Relative Strength Index (RSI), a technical indicator that measures recent price changes to evaluate the overbought or oversold conditions of the asset. Per his words, the RSI broke below a long-term trendline this month while bitcoin’s price remained up, in a notable divergence.
Moreover, the funding rate on crypto derivatives trading platform BitMEX has been favoring those bullish on the market, which implies BitMEX traders “are a little bit overzealous to the downside.” Taking all of this into account, he pointed to a potential $7,000 low if bears take over the market.
As CryptoGlobe reported, Tone Vays correctly said bitcoin bottomed at the $3,700 mark after its price crashed on the so-called crypto Black Thursday. CryptoCompare data shows that after dipping to the $3,700 mark, the flagship cryptocurrency quickly started recovering.
Featured image via Pixabay.
