Bitcoin Weekend Sees Higher Lows, Higher Highs
It has been a tiring several days of profit taking and after yesterday’s relative quiet, we saw an uptick in volatility approaching the weekend as Bitcoin price moved quickly upwards from a daily low of USD 11,447 to a high of USD 11,919, both already higher than yesterday’s respective price points.
There are two things to note from this move, which only took just over 5 hours to happen. One, that it happened in the entire afternoon of North American trading time, which could suggest that for once, speculators in that part of the world have turned into optimists, buying up at mid 11k levels. This means that for them to achieve significant profits, they would have to be aiming for prices above USD 12,000. The fact that they seem to think volume buys are prudent now could be a shift in sentiment, at least for the weekend.
The second thing to note, however, was that as soon as this 24-hour high was reached, price began deteriorating all the way down to current levels now at USD 11,567 (9:00 am UTC, CoinDesk). This does put the Asian market firmly in the seller’s stand, selling at every support level until now, although price has only decreased 0.1% from the same time yesterday.
So are we looking at a reversal of roles between both major sides of the trading world for this weekend? Or are we just looking at normal volatile action and scalping from opportunists? We will have to look at the next 8 hours, when Europe enters the fray, to see what kind of landscape they will pass on to the American continents today.
Meanwhile, in terms of market rumor-mongering, Trump’s Tweets yesterday are still creating a lot of talking points in the analyst community. Permabull Tom Lee of Fundstrat, of course, thinks that it is exactly this kind of comments that could result in a positive backlash for investors of Bitcoin. That it came on the back of comments against crypto by US Federal Reserve Chair Jay Powell and had a little lasting effect on Bitcoin price, was proof of Bitcoin’s resilience and a possibility of an unexpected pushback. Lee told Yahoo Finance:
“On balance, it’s a positive because cryptocurrencies and bitcoin really are in the main stage now — Congress, the Fed, the president weighing in. It’s going to force everybody who is not involved — and remember a very small percentage actually cares about crypto and bitcoin — it’s going to force the other 98% of the world to think about what it means.”
While the attacks from the most powerful central bank chief and the leader of the most powerful country on earth are without a doubt an attack on crypto, Lee believes that the mere fact that Bitcoin and its descendants in crypto have made mainstream political and economic consciousness means that adoption is on its way. He even believes that if these push Bitcoin investment, then price could easily elevate up to anywhere between “USD 20,000 to USD 40,000 sometime in the fourth quarter [of this year]”.
Achievement unlocked! I dreamt about a sitting U.S. president needing to respond to growing cryptocurrency usage years ago. "First they ignore you, then they laugh at you, then they fight you, then you win”. We just made it to step 3 y'all. https://t.co/N3tzUKELaK
— Brian Armstrong (@brian_armstrong) July 12, 2019
Coinbase CEO Brian Armstrong certainly echoes this mood, Tweeting that it was only a dream several years ago to imagine a US President talking about Bitcoin usage. Crypto influencer Anthony Pompliano as well admitted he “never envisioned that day” when “the President of the United States is going to be Tweeting about magic internet money“.
Elsewhere, mixed news of Bitcoin-related happenings took place on Friday just before the weekend. China reportedly has continued its crackdown on illegal Bitcoin mining, this time Zhenjiang police found and confiscated some 4,000 Bitcoin mining devices allegedly responsible for stealing over USD 3 million in electricity. In Thailand, crypto couldn’t look more upbeat as the government approved four more crypto exchanges to begin operations.
Technical analysts, on the other hand, are advising caution on this weekend and the week ahead. Most will admit that a bearish bias persists, especially when taking into account the entire crypto market, where altcoins have almost wiped out gains from the past few weeks and are struggling to find any support.
Bitcoin, although creating a daily high today, higher than yesterday, it was also unable to touch USD 12,000 so it could be a sign of bulls running out of recovery steam. On the bright side, hourly Relative Strength Index (RSI) right now has just crept into the oversold areas, so it could prompt many traders to enter the market, at least for day trades.
Any recovery attempt today or tomorrow will have to be at significant volumes, otherwise shallow attempts will probably fall victim to sell-offs around the USD 11,800 areas. Break USD 12,000 and at high volumes and long periods of time until Monday, and then the bears might fall back.
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