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Cryptocurrency market needs a factor to resume uptrend

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Bernardo Pascowitch, creator of startup Yubb, addressed the price of some cryptocurrencies in his daily analysis this Thursday (18th). BTC and GALA were some of the cryptocurrencies requested by the Brazilian’s followers.

According to Pascowitch, GALA – which rose 100% in a few hours – needs to undergo a correction before reaching a satisfactory risk-return ratio. The BTC, on the other hand, has optimistic indicators, but it still needs to clear much of the excess leverage before rising again.

GALA

Among the cryptocurrencies ordered for analysis, GALA recorded the highest increases. After all, the cryptocurrency was listed on the Coinbase exchange platform this week. As a result, it suffered the famous “Coinbase effect” and skyrocketed 100% after listing.

According to Pascowitch, the movement was indeed expressive, which brings a need for greater attention to those who want to buy this cryptocurrency.

“Perhaps the price of GALA will continue to go up after listing on Coinbase, but it has already gone up 100%. After rising so much, it is very likely that there will be a correction in the price”, warns Pascowitch.

For the analyst, it is more prudent to wait until the cryptocurrency reaches a new retraction between 38% and 50% of Fibonacci. In terms of value, this corresponds to a price range between $0.14 and $0.17. The current price of GALA is US$0.22.

BTC: leverage remains as bearish factor

Regarding the BTC, Pascowitch pointed out that the current bearish movement stems from the traders’ leverage. Fall on November 11 caused losses in the order of 4 billion in short positions.

In this sense, traders who traded with more money than they could have had to sell their positions, causing a ripple effect that swept the entire market.

According to Pascowitch, the positions of long/short contracts (buy and sell) in Binance corroborate this drop. The data indicate that the market is in excess of euphoria.

This Friday (18th), there were 4.38 contracts betting on the BTC’s high for each low contract. The analyst classified this moment as “exaggerated euphoria” which, at this moment, prevents the BTC from continuing to appreciate.

As a result, the purchasing force was depleted in the face of high sales volume. As long as this situation persists, the BTC price tends to stagnate or even test new supports.

“There is still a lot of leverage in the market. This needs to reduce for the price to be able to rise. We are in a downtrend in the short term. We need strong buy volume for reversal,” said Pascowitch.

Greed falls, price rises

In Pascowitch’s view, this relationship between purchase and sale contracts must fall to levels of two, one or less. If that happens, market sentiment is likely to change and investors become fearful that the uptrend will continue.

The main indicator that measures this movement is the Fear & Greed Index, or Fear and Greed Index. And after a week indicating Greed, the index changed to Fear in the last 24 hours.

BTC's Fear and Greed Index.

From the buyers’ point of view, this change is positive. It means that most of the market is starting to believe that the BTC’s rally in 2021 is over. Historically, this is the best time to enter the market, especially with BTC falling and cheaper than a week ago.

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All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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