Up and Away? Bitcoin Price Eyes $8,000 Or Higher
Bitcoin has staged a remarkable "V" shaped recovery from the last week's lows near $5,500, and may be looking at new highs ahead.
Nov 17, 2017 at 12:30 p.m. UTC
:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindeskuat/HFVJAHEICFDFNAZ4SXHQXH6WQU.jpg)
Bitcoin is still looking upwards, having achieved fresh record highs overnight.
As per CoinDesk's Bitcoin Price Index (BPI), the world's largest cryptocurrency by market capitalization rose to an all-time high of $7,990 at 01:18 UTC. According to CoinMarketCap, the cryptocurrency has gained 4 percent in the last 24 hours. Week-on-week, the BTC value has gone up by 12 percent.
All in all, the cryptocurrency has staged a remarkable "V-shaped" recovery from the last week's lows near $5,500. But, traders may be wondering if gains can continue.
, the investor community appears to be warming up to the idea of moving money out of equities and bonds and into bitcoin – sentiment arising from CME Group's upcoming bitcoin futures listing. Industry startups appear to be positioning as well, with Coinbase announcing yesterday a product launch for institutional clients.
Price action analysis appears to suggest the market is taking the news well. A potential rise well beyond the $8,000 mark is on the cards, although there is merit in being cautiously bullish.
Bitcoin chart
:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindeskuat/PYV35SNXAVG7ZAFJQ2AT42QRFU.png)
The above chart shows:
- The rally to record highs is backed by a rise in trading volumes. A high volume rally is a sign that the trend has legs
- However, the money flow index (MFI), which uses both price and volume to measure buying/selling pressure, doesn't reflect the "V" shaped recovery and remains flat. A bearish price-MFI divergence would be confirmed if bitcoin closes today on a weak note.
- The relative strength index (RSI) is well short of the overbought territory, thus there is scope for a further rally in bitcoin. However, again, a bearish divergence would be confirmed if bitcoin ends today with losses.
4-hour chart
:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindeskuat/HJYKQI7G5FGFRDAXSZRWHEO2YU.png)
There are no signs of stress on the above chart, except for the overbought nature of the MFI and RSI.
View
STORY CONTINUES BELOW
- Bitcoin looks set to rise above $8,000 and test $$8,187 (161.8 percent Fibonacci extension level of the move from the Jul. low – Aug. high – Sep. low).
- Only a break below $6,457 (61.8 percent Fibonacci retracement level) would signal a short-term bearish trend reversal.
- Bearish Scenario: A pullback to $7,200-$7,000 cannot be ruled out if prices fail again to rise above the $8,000 mark. Watch out for bearish RSI and bearish MFI divergence.
Balloons image via Shutterstock
:format(webp)/downloads.coindesk.com/arc/failsafe/user/1x1.png)