Bitcoin Runs into Minor Resistance After Setting Fresh Six-Week High
Bitcoin’s price declined slightly on Thursday, mere hours after setting a new six-week high. Despite the modest retreat, the leading digital currency is charting a bullish path based on price action and the momentum indicators.
The bitcoin price peaked at $4,145.00 on Bitfinex, the highest since early January when it reached $4,175. At the time of writing, the BTC/USD exchange rate was valued at $4,000, having declined 1.4% on the day.
As the following chart shows, the 20-period moving average crossed the 50-day period moving average earlier this week. This bullish crossover is usually a positive sign for buyers. The MACD has weakened in the last 24 hours but remains in positive territory.
At current levels, bitcoin is still on track to test the December high above $4,200. A clean break above this level would instill greater confidence in the bulls, possibly setting up a challenge of the long-term downtrend.
The path higher is paved with obstacles. Above $4,200, bitcoin would need to rally above $5,000 and eventually $5,500 to negate the long-term downtrend. Read more: Has Bitcoin Bottomed? A Closer Look at the Bullish and Bearish Cases.
Trade volumes have moderated in the last 48 hours but remain well above average. Virtual exchanges handled $8.6 billion worth of BTC trades on Thursday, according to CoinMarketCap. BitMEX was the single largest market, accounting for nearly 15% of the total volume. Spot exchanges accounted for the remaining balance.
Bitcoin’s Growing Appeal
Despite a devastating bear market, interest in bitcoin appears to be on the rise among millennials and younger generations. According to a survey of 1,000 online traders from eToro, 43% of millennials have more trust in cryptocurrency exchanges than the U.S. stock market. Members of Gen X are far more inclined to trust stock exchanges at a rate of 77%.
Crypto exchanges have been the target of relentless attack from cyber criminals looking to take advantage the nascent market. Billions of dollars have already been compromised. In 2017 alone, 11 major hacks resulted in the theft of $472.4 million. Last year, Japanese exchange Coincheck was taken for $530 million after hackers targeted 260,000 NEM holders.
The shift in attitude among millennials and other younger cohorts reflects a growing distrust of banks, which are the traditional power brokers of society. Earlier this week, a French court fined Swiss bank UBS $5.1 billion for aggravated money laundering and illegal bank soliciting. French media called it a record fine.
Many in the crypto community invest in alternative assets as a way to combat the traditional gears of finance. Anthony Pompliano of Morgan Creek Digital has popularized the phrase, “Long bitcoin, short the bankers” as a way of highlighting this paradigm shift.
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.
Featured image courtesy of Shutterstock. Chart via TradingView.