Although some traders believe that Bitcoin already looks “toppy,” Peter Brandt’s commodities trading legend claims that cryptocurrency is “redefining” the idea of being over-purchased in a recent message.
While he proceeds to clarify why this is common among all “historic” bull markets, he points out that the biggest cryptocurrency is in the midst of the third parabolic advance:
“Major bull markets become overbought majorly. Historic bull markets become historically overbought. Red arrows mark midpoints of parabolic advances.”
Image by tradingview.com
Overstretched bull markets are normal
Bitcoin climbed past $37,000 for the first time in history on Jan. 6 at 23:52 UTC on the Bitstamp Platform.
In the last three months alone, the number is now 172 per cent, which actually raises the question of the longevity of this rally.
Usually, stocks that trade well above their assumed worth are known to be the best selling candidates. Unlike the stock market, though, Bitcoin does not have forecasts of profits to decide if its value is rational. Numbers will vary from $0 to over bullish forecasts.
On the technical side, the Relative Strength Index (RSI) is above 87 on Bitcoin’s regular map, which means that the cryptocurrency is well over-purchased. However, in big bull markets, the RSI can remain exceptionally large for very longer periods of time. The same refers to over-sold situations in bear markets.
The value of the crypto market tops $1 trillion
The overall market cap of all cryptocurrencies has now reached $1 trillion, with Bitcoin alone accounting for 68.6 percent of that number.
Although its streak is certainly remarkable, Bitcoin is far from being the best-performing cryptocurrency throughout the past week. Ethereum (ETH) and Cardano (ADA) are up 63% and 88%, respectively, while Stellar (XLM) is up 188%.
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