BTC Consolidates around $8,000, Where to Next?
Bitcoin price action is muted, with support just under $8k per BTC, but incoming volatility is expected.
After its dramatic flashcrash at the end of last week, bitcoin has recovered and found a degree of equilibrium just beneath the $8,000 mark.
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Friday’s volatility was apparently caused by a single 5,000 BTC sell order on Bitstamp, which then triggered margin calls on BitMex. Bitcoin traded as low as $6,178 (Bitstamp), but rapidly recovered – there were plenty of buyers to be found beneath $7,000. On Sunday, BTC rose further to the $8,000 zone, around which it is now oscillating.
Bitcoin is apparently consolidating at (or just beneath) $8,000. RSI on the 1-hour and 4-hour charts is neutral, though on the daily it has barely come out of overbought territory. We have now seen three straight weeks of double-digit price growth, and so a pullback of some kind is only to be expected; this week may end in the red, though it is still far too early to say.
The recent high of $8,300 (bitcoin’s weekly closing price) puts in a double top with a lower high and marks a clear resistance zone. Nevertheless, there was strong demand in the $6,000 region. While the last few days have seen relative stability, volatility is likely to return as this period of consolidation comes to an end. Multiple technical and sentimental indicators suggest a bearish short-term scenario. The Fear and Greed Index stands at 69, registering its longest ever streak in ‘Greed’ territory.
The stand-out performer this week was BSV, which almost doubled in price yesterday – ostensibly on the news that Craig Wright had registered copyright for the Bitcoin white paper and original Bitcoin code. This was treated as a non-event by the majority of the crypto community, since no meaningful proof of authorship is required for registration. Jerry Brito tweeted, ‘Registering a copyright is just filing a form. The Copyright Office does not investigate the validity of the claim; they just register it. Unfortunately there is no official way to challenge a registration. If there are competing claims, the Office will just register all of them.’ Nevertheless, a vocal minority treated it as ‘proof’ that Wright is, indeed, Satoshi.