Bitcoin is trading on a firmer note today.
At press time, the bitcoin-U.S. dollar (BTC/USD) exchange rate is $5,840 across global exchanges. As per CoinMarketCap, the cryptocurrency has witnessed a 6 percent increase in the last 24 hours.
After topping out at record highs above $6,100 on earlier this week, bitcoin met a wave of sell offers as investors switched to alternative cryptocurrencies (most likely using fresh funds awarded by exchanges after a new fork).
However, while the new bitcoin gold (BTG) saw big declines on its first day of trading, bitcoin (BTC) turned higher from a low of $5,376, indicating fiat money could be entering the BTC market, resulting in higher prices.
Rumors are also doing the rounds that Amazon could announce that it will start accepting bitcoin at its quarterly earnings today. However, it should be noted that this seems highly unlikely, as the rumor (spread by an investor newsletter) lacks credibility and has been debunked numerous times in the recent past.
Looking ahead, it's possible bitcoin will capitalize on the sharp recovery and revisit record highs.
Price action analysis suggests the odds of the upwards move would improve if prices hold above $5,867.
Daily chart: BTC needs to hold above $5,867
The above chart shows:
- Strong resistance at $5,867 (Oct. 13 high)
- Bearish price-relative strength index (RSI) and price-money flow index (MFI) is still intact
- Another higher low established at $5,376.
View: 4-hour chart
A break above $5,867 would add credence to Wednesday's sharp recovery from the low of $5,376 and would open the doors for re-test of $6,050 levels.
Bearish scenario: Failure to hold above the descending trend line hurdle followed by a drop below $5,700 would open doors for a sell-off to $5,400 (support of the blue dotted rising trend line seen on the daily chart).
It's also worth noting that a drop below $5,700 would result in a bearish 5-day MA (moving average) and 10-day MA crossover.
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