Turning Tide? Bitcoin Tops $7,000 As Price Pushes Up
Bitcoin is maintaining a bid tone today, with prices testing the $7,000 mark.
As per the CoinDesk Bitcoin Price Index, the world's largest cryptocurrency by market capitalization rose to an intraday high of $7,009 at 11:25 UTC. At press time, the bitcoin-U.S. dollar (BTC/USD) exchange rate is around $7,007 levels. Data from CoinMarketCap indicates that bitcoin has gained nearly 6.74 percent in the last 24 hours.
The move marks a recovery of around 25 percent from bitcoin's recent lows near $5,000, though is still at least 10 percent short of the record highs above $7,800 hit last week.
Price action analysis suggests the tide is slowly turning in favor of the bulls, although the last major domino – the 61.8 percent Fibonacci retracement – is yet to fall.
Earlier today, the bitcoin price soared to over $6,830, achieving $6,905 at its peak, triggered by the increasing adoption of high profile investment firms and payment services providers.
Institutional Investors and Wall Street Are Ready to Invest in Bitcoin
This week, $95 billion hedge fund Man Group, announced that the company will invest in bitcoin and add the cryptocurrency to its diversified portfolio upon the launch of a bitcoin futures exchange by CME Group, the largest options exchange in the world.
Bitcoin chart
Bitcoin prices have moved higher after having consolidated above the key trendline level.
The chart above shows:
- The 5-day moving average (MA) has bottomed out and is now curled up in favor of the bulls, courtesy of the price gains seen today.
- Bitcoin is struggling to break above $6,986 (61.8 percent Fibonacci retracement of the recent sell-off).
- The RSI has moved back above 50.00 (in the bullish territory) and is trending upwards.
View
Retracement levels are based on the prior move (sell-off from record highs) and alert traders or investors to a potential trend reversal.
A close above the 61.8 percent Fibonacci (Fib) retracement level of $6,986 would indicate a revival of the bull run and open the doors for a move towards the record highs above $7,800.
As long as bitcoin trades below 61.8 percent Fib level, the 29 percent rally from the recent lows near $5,000 would qualify as a "corrective rally" in a strong downtrend (sell-off from record highs).
Bear case scenario: Failure to close above the 61.8 percent Fib level followed by a drop below the rising trendline support (seen today at $6,555) would indicate the corrective rally has ended. Prices could then proceed to test the upward sloping 50-day MA seen today at $5,723.
4-hour chart
The price action detailed under the bear case scenario would only add credence to the bearish 50-MA and 100-MA crossover seen on the 4-hour chart above and strengthen the case for a drop to $5,750–$5,723.
Also, note that the 61.8 percent Fib level of $6,986 is closely aligned with the psychological barrier of $7,000. Thus, we can conclude that $7,000 is a "make or break" level to watch out for over the next day or two.
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