Bitcoin – Bulls Moving in with $7,000 in Mind

Bitcoin gained 1.24% on Wednesday, partially reversing Tuesday’s 1.63% fall, to end the day at $6,589.9.

A start of the day slide to an intraday low $6,414.1 saw Bitcoin pullback through the day’s first major support level at $6,428.13 before recovering with Bitcoin continuing to find plenty of support at $6,000 levels.

Driving the broader markets through the morning, Bitcoin rallied through to an early afternoon intraday high $6,784.9, with Bitcoin breaking through the day’s first major resistance level at $6,632.83 and second major resistance level at $6,756.37 to test selling pressure at the 23.6% FIB Retracement Level of $6,757 before pulling back to sub-$6,600 levels by the day’s end.

For the Bitcoin bulls, there was some good news, with Bitcoin testing selling pressure at the 23.6% FIB Retracement Level for the first time since 11^th June, the gains from last week, together with the buying appetite through the middle part of this week supporting the formation of a near-term bullish trend from 24^th June’s swing lo $5,755.

In spite of the near-term gains, the extended bearish trend formed at 5^th May’s swing hi $9,999 remains intact however, with Bitcoin needing to break out from the 23.6% FIB Retracement level and take a run at the 38.2% FIB Retracement Level of $7,376 to cement a bearish trend reversal.

On the news front, it’s been a relatively quiet week, supporting the upward momentum at the turn of the quarter, with news of a report published by the European Parliament recommending that cryptocurrencies not be banned, while advising on how they should be treated being considered as a less severe stance than some may have feared, the European Parliament ultimately seeing cryptocurrencies as little threat to central banks and fiat currency near-term. The European Parliament did also acknowledge that cryptocurrencies should be taken seriously and are not just a medium for fraud and money laundering.

Interestingly, it was also noted that cryptocurrencies could provide a means of currency substitution in individual economies during periods of hyperinflation, financial crisis, political turmoil or war, which may pave the way for some of the major cryptos to ultimately become safe havens. The European Parliament’s view will certainly reignite the debate on whether the virtual world can take gold’s place as the tradition market choice, the physical nature and intrinsic value of gold having been the key attribute to gold’s status as a safe haven.

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At the time of writing, Bitcoin was down just 0.02% to $6,588.4, with a relatively choppy start to the day seeing Bitcoin fall to a morning low $6,525 and bounce to a morning high $6,704.7 before easing back to sub-$6,600 levels.

The moves through the morning left the first major support and resistance levels untested, while a return to $6,700 levels continued to support a run at $7,000 levels and a possible bearish trend reversal.

For the day ahead, a move back through the morning $6,704.7 high would be needed to bring the 23.6% FIB Retracement Level of $6,757 and the day’s first major resistance level at $6,778.5 into play, while we would expect Bitcoin to pullback from any run at $6,800 levels through the latter part of the day.

Failure to move back through to $6,700 levels to take a run at the 23.6% FIB Retracement Level of $6,757 could see a pullback later in the day to sub-$6,500 levels to bring the first major support level at $6,407.7 into play, while we would expect Bitcoin to avoid testing sub-$6,400 support levels, with a recovery to $6,500 levels likely in the event of a mid-afternoon sell-off.

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