Bitcoin, Ethereum and other cryptocurrencies have experienced a remarkably strong rally in recent days and weeks. In the last seven days alone, BTC gained 30 percent against the U.S. dollar, while ETH gained 60.6 percent.
Bitcoin is expected to continue its rise as long as the U.S. dollar continues to fall and institutional capital shifts from gold and other asset classes into BTC.
However, a leading crypto venture capitalist has argued that the market is overbought and ripe for a consolidation or correction. This consolidation or even correction will be healthy for the long-term trajectory of this bull market, he explains.
Why bitcoin could correct in the near future: Chris Burniske
Chris Burniske, a partner at Placeholder Capital, says that the crypto market „needs a pullback and consolidation if Bitcoin Supersplit is going to get into the $100,000 range and ETH into the mid to high thousands in this bull market.“
He explained that much like the ocean, markets, especially the crypto market, is made up of a „series of waves.“
Burniske shared the chart below, which shows that in previous bull markets, BTC experienced a series of waves in which there were large spikes and pullbacks.
In the last three months, Bitcoin has not experienced a significant pullback large enough to say that the current wave has ended. Burniske therefore believes that the markets are primed to cool down again.
This has been echoed by other market participants, who note that the extremely strong 200 percent rally Bitcoin has experienced since the October lows is unlikely to last too long.
Bitcoin and Ethereum Spike on Google Trends
While the market may be primed to cool off, it’s worth noting that Google Trends data shows that demand for the leading cryptocurrencies is skyrocketing. Joseph Young recently shared the data below, noting that the keyword „bitcoin“ has seen a sharp increase in search volume in recent weeks.
It’s almost halfway to 2017 highs, but is much higher than it has been in the last 12 months.
It is unclear whether or not this upswing will continue, but if it does, there could be another push higher as retail investor money begins to buy up a large amount of Bitcoin’s circulating supply.