This Week’s Outlook on Bitcoin Becomes More Positive
By the close of last week, speculation and rumors that the People’s Bank of China was preparing to outlaw the exchanges of Bitcoin became very serious. This happened just as a self-regulatory body created by the banking institution issued a report warning their members not to take part in cryptocurrency exchanges or even utilize any of their trading avenues.
This downward movement had negative effects on the price of the Bitcoin, and it dropped it below $3,800 USD, happening for the first time since August 22nd, 2017. It represented a one-week decline of more than $700.
This Week’s Bullish Rally
Fast forward to this week, the latest rally in BTC has seen this exchange coin hits the Fibonacci retracement level of 23.6% at $4,241 USD. Before slipping into this kind of trade, $4,200 of profit taking on either side took the edges off the whole rally. The rally is currently gathering the upside momentum simply because of a lack of any kind of negative news.
The recent shutdown of Chinese exchange losses has now been recouped. It is apparent that Bitcoin is about to consolidate in the short-term, even though the $4,370 USD as the next upside target still remains active and cannot be discounted in any possible way. This is mainly due to the volatile form of the asset. Talking of the downside, the area that is between $3,780 and $3,810 should give some support.
Some Smaller Investors Spooked by Volatility Last Week
The retreat to $4,255 USD just some few days ago suggests that investors who do not have financial resources to delegate their positions have been spooked by slight changes in the price. Whereas this unwinding of speculative bets could bear some reality, the outcome seems to be far from becoming a reality.
The overall outlook throughout the week has remained constructive, based on the fact that there are no indications of stress on the technical charts. There is also no truth to the indication that Bitcoin had already digested the bearish regulatory statement out of South Korea and China last week.
Does Bitcoin Still Have Upside?
The analysis of price action carried out at the beginning of this week suggests that the digital asset is more ready to go much higher. This comes after it had taken the hurdle of fifty-day moving average in a manner that is very convincing over the past weekend. The digital currency is currently trading at $4,290 USD – down 2.85% in the last two days. Week-on-week, Bitcoin has witnessed a price rise of 11.54%, whereas month-on-month, it still trying to cope up with a loss of 7%.
The outlook for the price of Bitcoin has remained very constructive. This break above $4,470 would definitely open upside down towards $4,700. The moving average that has now been in play for the past ten days is moving upwards, and therefore any kind of pullback will definitely be tackled by fresh bids. As for the case of possible downside, just two consecutive day-end closes below the moving average of ten days would abort the bullish view that has been reported on BTC.
The report has also indicated a bullish crossover, popularly known as golden crossover. In the report, fifty simple moving averages have cut the 200 moving averages from the lower part. This adds a kind of credence to the rebound from the hundred-day moving average. It is then followed by a move above the fifty-day moving average.
To summarize, the weekend rally in the BTC/USD – the Bitcoin / US Dollar exchange rate – may come to a close at $4,470 USD. This is expected to take place on Monday. However, bulls seem to be ready to crowd out any weak hand throughout this week.