Since early August, Bitcoin has shown a level of stability it hasn’t seen since early 2017. Throughout this week, bitcoin price has remained above the $7,200 mark.
Since Sunday, the cryptocurrency market has not seen any major movement to both the upside and downside, possibly due to the lack of momentum and volume in Bitcoin, Ethereum, and other major cryptocurrencies to initiate a strong mid-term rally.
But, the stability shown by Bitcoin could be considered as a positive indicator for mid-term recovery, as it is highly unlikely for any asset, commodity, or currency to see a major trend reversal following a 70 percent correction within a period of several weeks.
Based on the simple trend Bitcoin has recorded since January, the solid short-term recovery of BTC from the $6,000 mark to the $7,200 resistance level should be sufficient to lead BTC to test major resistance levels at $7,500 and $8,000.
The reversal of moving average convergence divergence (MACD) in the low price range of BTC at $7,200 suggests that $8,000 is the next short-term target for Bitcoin as shown in the weekly chart of BTC below.
One concern is that in previous recoveries from the $6,000 mark, Bitcoin price has climbed to the range of $8,000 to $10,000 relatively quickly. Since early August, BTC has initiated a slow rebound from the $6,000 mark to $7,300, without significant spikes on the upside.
Flood, a highly regarded technical analyst within the cryptocurrency community, stated that the close of the 3-day candle of BTC on September 3 is optimistic and that it may trigger the price of Bitcoin to rise in the short-term with solid support.
“Beautiful close. Rally from yearly lows intact. Next 3D close will be massive for $BTC especially given the huge short open interest. Low volatility with a huge cash buyer providing support. I think it’s unlikely the shorts are a massive ‘synthetic put’ ‘ala OKEX style,’ he explained.
Both 3-day and weekly candle charts of BTC demonstrate a movement to the upside for the dominant cryptocurrency in the short-term, especially if the volume of the currency can hold up in the $4 to $5 billion range.
Pundi X, VeChain, ICON, Ontology, Aelf, OmiseGo, and Theta Token, tokens which bled out against Bitcoin, Ethereum, and the US dollar throughout this week, have started to demonstrate solid gains with a fairly large spike in volume.
Newly found momentum of tokens is often a positive indicator for the short-term performance of the cryptocurrency market, as it signals the intent of investors to take high-risk trades over safe options like BTC that have shown stability for over a month.
In the upcoming 24 to 48 hours, if Bitcoin price can break out of the $7,500 resistance level, it may potentially eye a movement to $8,000.
Featured image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 6:02 PM UTC