The world is still grappling with the ill effects of the Coronavirus pandemic. Many countries are reporting new highs in the number of new cases of the COVID-19 casualties. However, there have been signs of optimism among investors in Wall Street who believe the worst is behind them. The US equity markets showed three consecutive days of gains and are currently on their fourth day. Bitcoin has surged along with the equity markets.
- BTCUSD was trading at $7,345.12 at the time of publication of this article.
Several strong reasons suggest Bitcoin’s fall in the short term is inevitable:
- One needs to keep in mind the fact that the world has not yet found a cure for the COVID-19 pandemic. And as the number of cases rises, the world economy will continue to fall. And Bitcoin, which has no commercial use right now, will be the hardest hit. It has been a mad rush for the cryptocurrency.
- Bitcoin drains power excessively and is considered a very risky instrument with no possible use in sight. Now, as a significant portion of Bitcoin trading is done by retail investors, it is undoubtedly highly volatile.
- As per the Technicals, the Relative Strength Index (RSI) shows that Bitcoin is likely in overbought territory. The prices are likely to come down soon.
- BTCUSD is currently trading in pretty low volumes. Thus, breaking out of the consolidation zone and the rising wedge, which is again a strong Bearish indicator, would be very difficult.
Thus, traders entering trades without seeing the broader picture might end up getting ‘Rekt.’ The prices would most likely drop deep. And for the patient trader, great opportunities would come pretty soon.