- Bitcoin recorded a spike of almost 9.7%, going as high as $7,772
- But we are still not out of the woods, the price can very well go in the low $6,000s
- 10,000 BTC added to longs, an increase of 43% and pushing for the ATH levels
- Wall Street also recording gains after the Dow lost 457 points on Tuesday
In a sudden move, Bitcoin jumped to $7,772 level on Bitstamp. The world’s leading cryptocurrency has been trading just around $7,000 after recovering from the drop to $6,500 on Nov. 25. We dropped to the lowest point in five days at $7,087 today only to jump $500 in a few minutes.
Currently, BTC/USD is trading at $7,464 with 24 hours gains of 1.84% as per Coincodex. The trading volume has also seen a slight increase to $414 million from less than $200 million earlier this week. The 7-day average real trading volume has been slowly trending upwards since October as well.
“The technical pattern does look more bullish but the fact that it was a spike that carried it over, rather than more gradual growth is a bit suspicious. Now we’ll need to see how it closes,” wrote Mati Greenspan, founder of investment firm Quantum Economics in his daily newsletter.
The crossover between the 50-week moving average ad the 100-week moving average has been forming this week which is typically a bullish signal.
If BTC closes above these two moving averages, a trend shift might be on the line but if not, $5,000 is the most likely area next. And then, we could be looking at a bottom early next year.
2021 will be bullish pic.twitter.com/NSYoBpn6Ap
— Majin (@majinsayan) December 3, 2019
Interestingly, 10,000 BTC has been added to the longs in the last 10 days on Bitfinex, which is an increase of 43% and pushing for the ATH levels.
“The steady rise after months of sideways makes me wonder if this is a single party trying to DCA in heavy,” said trader Jonny Moe about these longs.
However, in notional value — currently at $257 million, the longs are far from 2017 high at $619 million, even 2019’s notional value peaked at $323 million.
Bitcoin price might have seen some relief but it isn’t a guarantee that bulls are back in the market.
“If we need to capitulate, I don’t think it will happen now. More probably we will retest key resistance 7860-8090, and upper boundary of channel,” said analyst and trader CryptoWolf.
To be bullish, he said Bitcoin needs to break above and close above the key resistance area at $7,860-$8,090. Analyst Benjamin Blunts sees us eventually going to $6,800 but not before we make a few more ups and downs that won’t break above $7,600 level. Moe has even a lower target — it’s in the low $6,000s.
Some interesting confluence here in the low $6,000s on $BTC.
Falling wedge, descending channel, long term macro trend, and a major prior horizontal support/resistance level whose breakout led to the summer mini-bubble in May.
All pointing to the same thing. pic.twitter.com/8lt8GSqTu7
— Jonny Moe (@JonnyMoeTrades) December 4, 2019
Wall Street is also looking good following a report that the US and China are moving closer to agreeing on the number of tariffs to be rolled back.
After losing 457 points at one point on Tuesday following President Donald Trump talking about waiting until after the election before making a deal with China, the Dow Jones Industrial Average rallied Wednesday. Nasdaq and S&P 500 also pointed to sharp gains.
However, disappointing jobs data — data from ADP and Moody’s Analytics reported private payrolls rose by just 67,000 last month, well below the estimated 150,000 — had futures pare their gains.