Short-Lived Shine? Bitcoin Gold Could Fall Under $300
Bitcoin gold may have leapt up in the token rankings, but its gleam may soon dull, the price charts indicate.
Bitcoin gold (BTG) may have leapt up in the token rankings, but its gleam may soon dull, the price charts indicate.
Notably, the new cryptocurrency, a bitcoin spinoff with a protocol designed to make mining more democratic, has now become the fifth largest cryptocurrency by market capitalization.
Yet, despite a rally to a high of $413.74 on Nov. 24, and a doubling of prices since Nov. 19, BTG faces plenty of skepticism in the investor community over its real-world role. Comments on social media indicate the investors feel the token is overvalued, with few (or no) apparent use cases.
As a result, the gains to over $400 look to be speculative in nature, unless traders are anticipating use cases to appear.
The price action analysis, though, indicates a correction may be on the way.
At press time, BTG is at $361 – up 4.5 percent for the day, as per CoinMarketCap. Over seven days, the cryptocurrency is up 185 percent.
The above chart shows:
- A bull flag breakout followed by a rejection at the rising trendline hurdle.
- The relative strength index is losing altitude, signals bulls are losing control.
A bull flag breakout is a continuation pattern ( i.e. an upside break yesterday meant the rally from the low of $150 has resumed). However, prices failed to cut through the resistance offered by the rising trend line.
The weak follow-through to the bull flag breakout indicates exhaustion, and suggests the potential for a drop to $250 levels in the short-run.
However, a break above $400 in the next 12 hours could yield a rally to fresh record highs above $480 levels.
Gold pan image via Shutterstock
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