- A recent report by the team at Crypterium research postulates that Bitcoin could drop further
- The analysis is based on the weekly Bitcoin chart and predict a retest of $11k and/or $10k
- Furthermore, they cite a reduction of users as another warning sign based on Metcalfe’s law
- At the time of writing, Bitcoin is trading above $11,400 and a weekly close above $11,200 would be bullish
In their most recent market analysis, the team at Crypterium research explained to readers that Bitcoin’s weekly chart was showing serious signs of weakness and should not be ignored. According to the report, Bitcoin’s weekly RSI and Stochastic indicators are overbought and foreshadow a possible fall for BTC to $10k in the future.
At the same time, with a high probability, we can see the price of $10,000 per Bitcoin in the near future.
On the weekly timeframe, the RSI and Stochastic indicators are still in the overbought zone. In addition, candlestick patterns also indicate a trend reversal. All this foreshadows the imminent fall of Bitcoin.
A Reduction of Bitcoin Users Hints At A Future Drop
Furthermore, and using Metcalfe’s law, the team explained that Bitcoin’s user base was decreasing and this was another warning sign that a move down was in the making.
In addition, we have big doubts about current and future growth. This is due to Metcalfe’s law, which says that “the value of the network directly depends on the number of users”…
We see a large divergence. The price is growing much more actively than the network itself, which is not typical for global growth cycles.
Moreover, for Bitcoin, active addresses have always been a leading indicator. The price followed the activity, not the other way around. The opinion that the asset will grow first, and then the network activity will grow, does not pass the test in its 11 years of history.
Bitcoin Still Has a Weekly And Monthly Close
The weekend is once again upon us, and with it, Bitcoin’s weekly close tomorrow, August 30th. Since the $11,600 support level was lost earlier this week, $11,200 will be the level to watch this weekend.
Additionally, and on the following day, August 31st, Bitcoin’s monthly close is also on the horizon. These back to back events will most definitely set the pace for Bitcoin in the month of September. A monthly close above $11,200 will be a second for Bitcoin. The last time the King of Crypto opened and closed a month above $11,200 was in December 2017.
To note is that Bitcoin opened the month of August above $11,300. Therefore, a close above $11,200 would provide some level of confidence for bulls.