Bitcoin Price Holds $6,400 as Short-Term Outlook Improves
Bitcoin’s price is once again trading on stable ground, with the technical indicators pointing to an improved short-term outlook. Combined with ether’s sharp reversal, newfound stability in bitcoin suggests appetite is slowly returning to the digital currency market.
The bitcoin price swung below $6,500 on Friday but found firm support in the low $6,400 region. At the time of writing, BTC was valued at $6,458 on Bitfinex, down roughly 0.5% from the previous day. The cryptocurrency reached a high of $6,596.50 earlier in the day.
Bitcoin saw daily volumes of $4.3 billion as the total market cap rose to $11.5 billion, according to the latest available data.
Price action is charting a bullish path, according to the 4-hour technical chart. On Thursday, bitcoin’s price crossed above the 50-period moving average; at the height of the rally, prices came to within a few dollars of the 200-day MA. Momentum has weakened but remains positive, according to the relative strength index (RSI).
The broader cryptocurrency market was valued at $198.5 billion on Friday, with total trade volumes reaching $14.4 billion. Ethereum was the strongest performer among the majors, gaining 7.9% to $206.
Relief Rally Coming?
Bitcoin’s newfound stability is a positive indicator for the broader cryptocurrency market, which tends to move in the same direction as the leading digital currency. BTC continues to exert a strong gravitational pull on the market despite recent price trends showing a decoupling between bitcoin and leading alternatives such as Ethereum. As a general rule, where bitcoin goes, so does the market.
Most analysts expect bitcoin’s price to trek higher for the remainder of the year, though forecasts are nowhere near as optimistic as they were several months ago. Forbes’ interactive bitcoin price estimator has pegged a year-end target of $8,500 for the leading digital currency, signaling a steady recovery up ahead.
The return of risk appetite to the broader financial market is also a positive sign for digital assets, which are still classified as riskier assets despite bitcoin’s growing safe-haven status. U.S. stocks have bounced back sharply in recent sessions following a miserable post-Labor Day week. Volatility, as measured by the CBOE VIX, is trading at two-week lows.
Investors are hopeful that China and the United States will be able to work out a new trade deal in the coming months after Beijing welcomed the Trump administration’s offer to revive negotiations. The superpowers are expected to return to the negotiating table later this month.
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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