Bitcoin Price Claws Back Above $7,000 with Further Gains Likely
Bitcoin’s price swung back above $7,000 Tuesday as investors rallied behind reports that Goldman Sachs is exploring a custody offering for cryptocurrency funds, a move that could hasten adoption at the institutional level. Meanwhile, the technical charts suggest bitcoin’s short-term recovery is only getting started as the bulls eye a re-test of the 100-day moving average.
BTC/USD Price Levels
The bitcoin price reached a high of $7,150 on Bitfinex Tuesday as investors bid up the digital currency from yesterday’s lows of $6,841. The bitcoin price was last seen trading at $7,080 for a gain of 2%.
BTC/USD found support at the 50-day moving average, with the bulls now eyeing a re-test of the 100-day MA currently situated around $7,450. Overall, momentum remains fairly weak with the Relative Strength Index (RSI) hovering in the low-to-mid 40s.
Trading volumes have also recovered over the past 24 hours, according to data provider CoinMarketCap. Exchange-traded volumes in bitcoin reached $4.2 billion on Tuesday after hitting a low of $3.7 billion on Monday.
Bitcoin Benefits from Positive Speculation
Bitcoin’s minor recovery comes on the heels of speculation that Goldman Sachs is exploring ways to solve crypto’s custody challenge. As Hacked reported Monday, the Wall Street mega bank is considering holding securities on behalf of cryptocurrency funds to safeguard digital assets from cyber attacks.
Meanwhile, the U.S. Securities and Exchange Commission (SEC) is expected to weigh in on an application for a bitcoin exchange-traded fund (ETF) that analysts say has the best chance of being approved. The joint application submitted in June by VanEck and SolidX plans to insure physical bitcoin against theft or attack, setting it apart from other attempts to securitize digital assets. A decision that accepts, denies or delays the application could come as early as this week.
A report published Tuesday by Bloomberg also highlights bitcoin’s dramatic evolution over the past five years. According to the U.S. Drug Enforcement Administration (DEA), the ratio of legal to criminal activity in bitcoin has flipped, with speculators now dominating the market.
Five years ago, illegal activity accounted for roughly 90% of bitcoin transactions; today, that figure has dwindled to just 10%.
Bitcoin’s market share has also climbed over the past three months with investors disavowing lesser known, and often more volatile, digital assets. Fundstrat’s Tom Lee told CNBC Tuesday that investors have decided that “bitcoin is the best house in a tough neighborhood.”
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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