Bitcoin Price Eyes Recovery After Bulls Reaffirm Key Support
Bitcoin’s long road to recovery took a positive step Thursday, as prices rose above $6,400 for the first time since the weekend. What’s more, the technical charts show the potential for an even larger breakout in the near term.
The bitcoin price is gaining momentum on Thursday as part of a much wider upswing in digital asset prices. BTC reached a high of $6,490 on Bitfinex. It was last seen trading at $6,450 for a gain of 1.9%. Total trading volumes across all major exchanges was $3.9 billion, according to CoinMarketCap.
BTC has crossed the 50-day period average with the latest uptrend, a positive sign for the bulls. The next major resistance test is around $6,600, or the 200 MA. The moving averages completed a bearish crossover earlier this week.
The rally appears to be gaining momentum, according to the relative strength index (RSI). An RSI above 60 is considered bullish by most accounts.
The broader cryptocurrency market rose $10 billion on Thursday to $196 billion. Early signs seem to indicate that the rally is a dead cat bounce as altcoins and tokens recover from their recent yearly low.
At current prices, bitcoin is capitalized at $11.8 billion, which represents nearly 57% of the overall market.
Bitcoin as a Safe Haven
Bitcoin’s safe-haven status in the eyes of investors has increased even as prices struggle to break free from the downtrend. Since early May, bitcoin’s share of the overall cryptocurrency market has increased 20 percentage points to a high of 58%. Over the same period, altcoins and tokens have bled market cap as investors cut ties to lesser known assets. With the bull market in decline, bitcoin is the closest investors have to a “sure thing.”
Recent price action also reveals a major decoupling of bitcoin and Ethereum, the two largest blockchains that have, at times, been seemingly tied together trend-wise. Whereas bitcoin has barely moved compared with 30 days ago, the Ethereum price has slumped more than 30%. This has led some analysts to conclude that the ICO market is cooling down.
Despite the market turbulence, bitcoin investors have continually defended the $6,000 price level, which is commonly associated with mining costs. This means there is a large vested interest in keeping BTC above that key threshold.
There’s some indication that digital currency miners are looking to grow their footprint but are waiting for prices to cooperate. Wuhan General Group Inc. of China is looking to acquire a former U.S. Department of Defense data center for the purpose of mining digital currency. As Investing.com reports, it plans to house 1,200 mining machines at the former DOD building.
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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