After the Collapse: Bitcoin Price Holds Near $6,500 Amid Strong Volumes
Bitcoin’s price edged higher Thursday, as markets stabilized from one of the worst routs in recent memory.
Bitcoin is currently trading at $6,457 on Bitfinex for a gain of 2.8% on the day. The leading digital currency is little changed compared with 24 hours ago.
Daily turnover in BTC crossed the $5 billion mark late Wednesday and has since fallen back to around $4.8 billion, according to data provider CoinMarketCap. As Hacked previously reported, bitcoin typically requires daily turnover of at least $4 billion to generate a sustained rally – at least, this is the trend we’ve observed during the 2018 bear market.
Bitcoin’s trading range experienced a patch of volatility between 0:700 UTC and 11:10 UTC Thursday, with prices fluctuating between $6,249.07 and $6,549.97, based on CoinMarketCap data. The coin swung through a similar peak and trough roughly 17 hours earlier.
In the meantime, the bitcoin price appears to be recovering from oversold levels, which means further gains could be likely. The closely watched relative strength index (RSI) bottomed at 30 on Wednesday before recovering at 35. Based on this indicator, BTC is still oversold.
The cryptocurrency market is increasingly tilting toward bitcoin, a sign investors are less keen on experimenting with altcoins and tokens during the latest downturn. Bitcoin’s share of the total market cap is a tad below 49%, the highest since December.
After the Selloff
The crypto universe is coming off one of its worst days in recent memory as investors reacted negatively to headlines that the U.S. Securities and Exchange Commission (SEC) is delaying a ruling on a highly-touted bitcoin ETF. In the case of bitcoin, prices fell through a critical support cluster on Wednesday en route to fresh three-week lows.
With the loss, bitcoin has not only reversed July’s strong recovery, it has entered bear-market territory based on the traditional definition of the term. The next critical line of support is likely $6,000 – a key psychological threshold. Buyers have previously shown a vested interest in protecting this level.
Although piecing together a short-term outlook is difficult following yesterday’s collapse, bitcoin must return to the $7,000 range to shake off bearish headwinds.
The cryptocurrency fell below $6,000 on multiple occasions this year, with the most recent swing low occurring in late June. Over the next four weeks, BTC values would rise more than 20%.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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