According to primexbt news Bitcoin has recovered spectacularly after a 50% drop, from a low of $3,700 to $7,470. This leads traders to believe that the cryptocurrency market will grow strongly. However, a prominent trader has warned that Bitcoin's RSI (relative strength index) indicates that the market is about to undergo major volatility.
Bitcoin is about to plunge because the RSI is still falling
According to Eric Thies, a well-known crypto trader, the recent rally in the Bitcoin market has failed to push the RSI into a bullish zone. From the Bitcoin RSI chart, Thies said that “the overall RSI shows a bearish bias in the near term.”
Although quite complicated, looking at the chart, it can be understood that Bitcoin's recent rally to $7,470 could not bring about a breakout but as the RSI indicates, Bitcoin will fail to break through resistance.
Not just a mid-term drop
Thies is not alone in assuming that Bitcoin will drop in price after a 100% increase. In the April "Cryptocurrency Trader's Journal" featuring bulletins compiled by BitMEX CEO Arthur Hayes, Hayes suggested that Bitcoin will likely retest at $3,000, "which is absolutely perfect." It's all possible... if the S&P 500 falters and tests $2,000." Hayes also predicts a global market decline, with all markets equally affected:
"Bitcoin will be owned out of control. Will the price retest at $3,000? That's for sure. Because when SPX is volatile and tests $2,000, all the markets will be in turmoil again. The worst will be like the Q1 downturn, it took us almost 100 years of disequilibrium to get rid of the old regime."
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With the same view, Chris Burniske from Placeholder Capital Fund said that if the financial market has a "sell-off", "Bitcoin will also be inevitable", "BTC will fall even lower, possibly even lower than that." could be $5000, $4000 and $3000." Unfortunately, after the recent bull run, there are signs that the Bitcoin price is about to fall again.
Scott Minerd - director of financial services and fund manager Guggenheim - in a statement last Sunday emphasized that this epidemic crisis will continue to hamper economic growth, causing a slump next, causing the stock market to drop another 40%:
"The market will fall into panic as unemployment rises, economic growth indicators and corporate earnings take a hit."
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