It has been a week of characteristically Bart-like pumps, forming staircase upwards from the lows of $5,800 at the end of June. At one point, bitcoin had gained $1,000 on its local low, and sits a little below $6,600 at the time of writing.
On 4 July the Americans celebrated Independence Day. The holidays are generally down days for the bitcoin market, and this broadly proved to be the case: a weak push higher towards $6,800 failed to sustain momentum, and was followed by a fall below $6,500.
As things stand, resistance lies in the $6,800 zone. Pushing above $7,000 would be a positive development, but we’re still far from behaviour that could be described as bullish. But in fact, for where we are in the market cycle, this is just fine. There is a pattern to the way these things play out, and the need at the moment is for consolidation and a period of lower volatility. This will provide the foundation for the next major move up, and a sustainable rally cannot occur unless this first takes place. The long-term moving averages need time to catch up with price, which they are slowly doing. The 50-day MA is currently around $7,000 (reinforcing the existing resistance there) and the 200 MA around $9,300. In due course the price will inevitably rise above the key 50 MA level, and we will ultimately experience the ‘golden cross’ that is the counterpart to the bearish ‘death cross’ that mainstream analysts talked about so much earlier this year. In other news, the looming trade war between US and China could push money back into crypto as investors seek a safer haven and alternative play.
Whilst recent predictions have been all over the place, it is worth bearing in mind the analysis that Willy Woo put forward in May: https://www.newsbtc.com/2018/05/26/analyst-says-bitcoin-may-drop-5500-new-upside-q3-q4-2018/. In a bear market, analysts start to panic and predict overly-pessimistic outcomes — some calling for $3,000 or even $1,000, lining up with previous all-time highs or areas of activity. Woo called it pretty much perfectly, predicting that the market would bottom out in the $5,700s at the end of June before consolidating and rising again from July. Not too bullish, not too bearish. Of course it’s too early to say that this will occur, but it’s a reasonable analysis given the data.
TL;DR things are turning around, slowly — and that’s how it needs to happen.
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