Bitcoin Price Key Highlights
- Bitcoin price has been on a tear in the past few days, thanks to the pickup in risk aversion.
- Price is now back to the long-term area of interest around $4000 and a break above this region could turn it back to support.
- Technical indicators are suggesting that bitcoin price could head back down from here.
Bitcoin price is back up to an area of interest around the $4000 handle, with indicators signaling that it could hold as resistance once more.
Technical Indicators Signals
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. This means that selling pressure is more likely to return than for buying pressure to pick up. In addition, the 200 SMA is around the top part of the area of interest, possibly keeping a lid on more gains.
If the selloff resumes, bitcoin price could drop to the support around $3600 or all the way down to $3200. Stochastic is already indicating overbought conditions and turning lower could draw bearish momentum in. RSI is heading north but is also approaching overbought levels, which reflects exhaustion among sellers.
However, if bulls continue to stay on top of their game, bitcoin price could climb towards the record highs near $5000 once more or even attempt to create new ones.
Market Factors
The presence of risk aversion was enough to prop bitcoin price up in the past few days, even with the pickup in dollar strength. Perhaps the prospect of Fed tightening is keeping gains in stocks and commodities in check, and this is usually positive for bitcoin.
Apart from that, the looming possibility of an attack from North Korea is keeping digital gold supported. If tensions escalate, the flight to safety could actually move away from the dollar as the US mainland is vulnerable to a strike. Apart from that, remarks from Morgan Stanley’s CEO on how bitcoin is more than just a fad was enough to shore up demand for the cryptocurrency.
“The concept of anonymous currency is a very interesting concept — interesting for the privacy protections it gives people, interesting because what it says to the central banking system about controlling that,” said James Gorman.