0

Bitcoin Price Analysis: BTC On The Verge of Flashing Sell Signal

7 Min Read
Last Updated March 27th 2021

Daily Bitcoin BTC Price Forecast

  • Bitcoin price has dropped below the $56,000 psychological level.
  • The parabolic SAR in the 4-hour Bitcoin price chart has reversed from bullish to bearish.

Between February 14 and February 21, the Bitcoin price has risen from $47,150 to $57,300. Since then, the bears have corrected the price and taken BTC down to $55,750. Let’s take a closer look with technical analysis.

 

Bitcoin Price Is About To Go Down?

This Monday, the Bitcoin price has dropped by more than $1,000 and is currently priced at $55,975. Prior to this dip, the relative strength index (RSI) was hovering in the overbought zone. Now, the RSI has started dipping towards the neutral zone. Looking at the TD sequential detector, it is on the verge of flashing the sell signal in the form of a green-nine candlestick.

btc/usd daily chart 022221

Image: BTC/USD daily

There is a healthy support at $54,000 which seems to be robust enough to absorb a lot of selling pressure. Previously, at this level, 318,300 addresses had purchased 308,500 BTC tokens.

btc/usd volume chart 022221

Image: IntoTheBlock

The 4-hour Bitcoin price chart has two negative signals:

  • The MACD shows increasing bearish momentum.
  • The parabolic SAR has reversed from bullish to bearish.

btc/usd 4-hour chart 022221

Image: BTC/USD 4-hour

 

JPMorgan Strategists: Bitcoin Price Fair Value Is At $25,000

In a recent report, analysts at JP Morgan have claimed that Bitcoin is trading at twice its fair valuation. The report also offers insight into several aspects of fintech, blockchain and digital assets.

JPMorgan’s strategists believe Bitcoin is an economic sideshow and that the real story lies in the rise in digital finance. The largest crypto has been continuing to fight for its place alongside gold as an alternative currency for a while now. To match gold’s market value, BTC would have to trade at $146,000, the report added. In order to reach this price, institutional investors would have to take over the market. 

Bitcoin’s appeal and competition with gold as an “alternative” currency will likely continue as millennials become a more important component of investors’ universe and have shown their preference for “digital gold” over traditional gold. 

The analysts also claimed that Bitcoin is highly overpriced. They noted that the asset's fair value is at $25,000 - less than half its current price. The coin’s mining cost, which stands at $11,000, is the lower bound of its fair value range.

In fact, an argument can be made that the $25k price that equalizes Bitcoin with gold in risk capital terms could be considered as an upper bound of its fair value range as this price already frontloads (at current levels of volatility) any long-term upside for Bitcoin stemming from real money institutional adoption. 

The report also criticized the narrative that Tesla’s recent Bitcoin investment will attract more institutional investments. The bank noted that Tesla is an outlier and that most corporates still consider Bitcoin to be too volatile to invest in. 

The report also outlined how USDT is Bitcoin’s biggest tail risk. JPMorgan believes that Bitcoin’s trading volume is too dependent on USDT. Citing data from asset manager NYDIG, the bank claimed that 50%-60% of Bitcoin trades for USDT. 

A sudden loss of confidence in USDT would likely generate a severe liquidity shock, jeopardizing access to the largest pools of demand and liquidity. 

Tether claims that USDT has a 1:1 backing by USD reserves and other assets. However, as the report observed, it has yet to prove this with an independent audit.

 

Square Partners With Crypto Group to Create More Black Bitcoin Billionaires

In a bid to raise Bitcoin awareness among black investors, Jack Dorset’s Square has recently partnered with Clubhouse’s largest crypto focus group - Black Bitcoin Billionaires. According to an official update, the group’s organizer Lamar Wilson is spearheading the partnership in order to create “more black millionaires'' through a month-long campaign that began at the beginning of February. 

Black Bitcoin Billionaires is targeting its efforts on increasing Bitcoin adoption among black families and investors. The group will use the CashApp to help raise awareness. According to a Decrypt report, Black Bitcoin Billionaires host Isaiah Jackson said: 

Cash App is a tool that a lot of black Americans use. We wanted ease of use, and to partner with a company that puts their money where their mouth is. 

Jackson added that he was the first to reach out to Dorsey and CashApp co-creator Brian Gassadonia over a possible partnership. The group’s organizer Wilson said that he hoped the campaign would help narrow the generational wealth gap and set the right tone for other corporate sponsors. 

 

Elon Musk And Peter Schiff Butt Heads On Bitcoin

Elon Musk-led Tesla recently acquired Bitcoin worth $1.5 billion and it appears that Musk is increasingly advocating for the flagship crypto. He recently disagreed with popular Bitcoin critic Peter Schiff on Twitter. 

In a Twitter post, Schiff had quoted Musk and agreed with his views on money, saying both fiat and digital currencies are nonsense.

“According to @elonmusk "Bitcoin is almost as BS as fiat money." So Musk regards both #Bitcoin and fiat as BS. I agree, I just think Bitcoin, which is digital fiat, is even more BS than the paper fiat issued by central banks. #Gold is not BS. It's real money and better than both!”

Schiff continued to say that Musk should be able to identify the key differences between tangible features and “a string of numbers.” He implied that gold has more functional use as a currency than cryptocurrencies. He added: 

Money isn't data. Data can represent money but can't replace it. Money improved barter, gold improved money, and data improved #gold. Bitcoin is a return to barter. All sellers will accept money. With #Bitcoin you must find a seller who has what you want and wants what you have.

To this, Musk responded by defending crypto. 

“An email saying you have gold is not the same as having gold. You might as well have crypto. Money is just data that allows us to avoid the inconvenience of barter. That data, like all data, is subject to latency & error. The system will evolve to that which minimizes both.”

Musk, however, did add an extra tweet saying:

“That said, BTC & ETH do seem high lol”

 

Bitcoin Price is Expected To Reach These Levels

We expect the Bitcoin price to drop to the $54,000 support level.

Top Brokers in
    All Regulated Brokers
    67% of retail clients lose money when trading CFDs with this provider.