While Bitcoin (BTC) is still not decidedly in an uptrend, it is doing a lot better than it was a bit earlier this week, when the cryptocurrency cratered to $9,500 in a massive -8% day. One model, however, suggests that the pain isn’t over for the cryptocurrency market just yet.
Hold on to your hats!
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Bitcoin Still Overvalued, Model Suggests
As detailed heavily by NewsBTC, Bitcoin hasn’t had the best of weeks. At one point, back when Bitcoin found itself in and around $9,500, price trackers suggested that the cryptocurrency had shed 20% in a matter of seven days.
But the pain might just get worse. Timothy Peterson, an industry fund manager and cryptocurrency analyst, recently published the below model on Twitter that relates the premium of Grayscale’s Bitcoin Trust shares (GBTC) to the value of BTC.
— Timothy Peterson (@nsquaredcrypto) August 18, 2019
For those unaware, Grayscale’s product trades on over-the-counter markets, but often at a premium to the actual value of the BTC backing a share.
Peterson’s model predicts shows that ever since the start of the year, the higher the premium for GBTC over Bitcoin spot, the higher the spot price of BTC headed. With the premium currently tapering off per his analysis, Bitcoin is currently “overvalued and should [be trading] between $8,000 and $10,000”.
This lines up with a number of analyses from leading crypto traders, who suggest that Bitcoin is likely to grace the $8,000 range in the coming days. Per previous reports from NewsBTC, Financial Survivalism recently argued that his target of $8,775 is “looking good, citing the clear bear flag being exhibited on BTC’s short-term chart.
Survivalism adds that there has also been a short-term “death cross” of certain moving averages, strongly implying a further move lower in the coming days.
— Tyler D. Coates (@Sawcruhteez) August 18, 2019
The analyst first mentioned this target last week, when he claimed that with buy pressure decreasing and sell pressure increasing, he believes that Bitcoin will fall over the coming week to touch the bottom band of a short-term price channel.
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