According to analyst Gary Savage, there has been a “false breakout” of Bitcoin, the largest cryptocurrency by market cap.
Savage pointed to the fact that cryptocurrency miners have been “diverging badly” as the reason why market participants should have been more cautious.
Is this time really different?
The stunning success of multiple Bitcoin exchange-traded funds launched by major institutions such as BlackRock and Fidelity has been the main bullish narrative propping up the largest cryptocurrency. Last week, the price of the top coin managed to achieve a new lifetime high of $73,737 due to excessive exuberance that was driven by growing institutional acceptance.
With that being said, the analyst warns that this time might not be different. “Human nature being what it is we saw lots of people trying to rationalize why this time was different and it didn’t matter,” he said.
“I saw the same behavior with uranium right before the top. I often see this with gold miners at tops,” he added.
He further noted that mining companies diverging during the late stage of the bullish cycle should have been a warning sign.
After being confronted by a Bitcoin bull, he doubled down on his bearishness, adding that people tend to get caught at the top of bubbles.
Bulls and bears square off
According to Julio Moreno, head of research at CryptoQuant, Bitcoin has been in an overheated bull phase since it crossed the $65,000 threshold.
As reported by U.Today, the Bitcoin market is still driven by “extreme greed” despite the fact that the flagship cryptocurrency experienced a substantial correction, together with the rest of the market.
Gold bug Peter Schiff took a victory lap over Bitcoin’s recent correction, predicting a brutal bearish reveal for the cryptocurrency.
At the same time, Bitcoin bulls mainly remain defiant, dismissing the recent price correction as merely a bump in the road.
Joe Carlasare, a commercial litigator supporting Bitcoin, described this as a “garden variety correction.”
