Although the two biggest cryptocurrencies, bitcoin and ether, have lost more than half of their value in 2018 alone, experts believe that another bull run is on the horizon, Bloomberg reported on September 27, 2018.
Chart Indicates Bitcoin Bull run on the Horizon
Caused by a regulatory crackdown and a rejection of Bitcoin ETFs by the SEC, the world’s largest cryptocurrency has seen its price decline by more than 50 percent in 2018. The financial authority has also dismissed nine separate requests to list cryptocurrency funds in August 2018, citing continued concerns about market manipulation and the asset’s volatility.
However, the cryptocurrency’s outlook might not be so bleak, as the bitcoin bulls are looking to new technical signs in hopes that the cryptocurrency reverses its recent slump.
In a September 27 report, Bloomberg analyzed the RIG trend lines, a leading technical indicator that is a combination of the RSI and momentum studies. According to the report, the momentum gauge crossed the relative strength index (RSI) gauge, which indicates a positive price movement for Bitcoin may be on the horizon.
RIG trend lines.
The chart shows that this is the fourth time the momentum gauge crossed the RSI gauge in this year alone, with each crossing followed by a rise in Bitcoin’s price. Bloomberg noted that the last time this occurred was in mid-August when the cryptocurrency’s price rose by 21 percent over the next three weeks.
Ether also about to “Rally Strongly”
Bitcoin wasn’t the only cryptocurrency having a tough year, as world’s second-largest digital asset is also down more than 70 percent since January. CoinDesk showed that in the past three months alone, ether has dropped 50 percent and largely underperformed other top cryptocurrencies.
However, the recent price slump might not spell doom for the digital currency yet.
Tom Lee, managing partner and head of research at Fundstrat Global Advisors, told CNBC that the last four out of four times it lagged its peers that badly, by two standard deviations, ether saw a “major trend reversal.”
Lee also said that the sentiment towards ETH was overly negative and that the token underperforming its peers by two standard deviations was a “sign of capitulation.”
According to CNBC, Lee, who was J.P.Morgan’s former Chief Equity Strategist, said the cryptocurrency was “dogged” by a substantial supply being sold from EOS, which built its platform on Ethereum then switched over to its native token.