Bitcoin – Just Turned Bullish, But Can it Hold?

Bitcoin’s rally through the start of the week led to the formation of a near-term bullish trend, with momentum continuing in the early hours as market angst over rules and regs easing following the FSB statements early in the week.
Bob Mason

Bitcoin rallied 8.79% on Tuesday, following Monday’s 5.59% gain, to end the day at $7,320.4, Bitcoin’s first $7,300 day’s end since 10th June’s $7,473.9.

Following a relatively range bound morning that saw Bitcoin recover from a morning intraday low $6,666 back through to $6,700 levels, a mid-afternoon rally saw Bitcoin break out from the 23.6% FIB Retracement Level of $6,757 to an intraday high $7,483.9, with Bitcoin breaking through the major resistance levels on the way.

While the majority of the majors were unable to break out from the 23.6% FIB Retracement Level, the breakout saw Bitcoin Cash break through the 38.2% FIB Retracement Level of $7,376 on the way to the afternoon high, supporting a bearish trend reversal from 24th June’s swing lo $5,755.

It’s been a long time coming and Bitcoin’s failure to move back through to $7,000 levels and break free from the Bitcoin bears has been largely attributed to regulatory uncertainty, with the G20’s planned unified rules and regulations for the cryptomarket  raising concerns of a material shift in the cryptomarket landscape.

The news wires have been relatively friendly this week however, with the G20’s FSB, led by BoE Governor Carney, having submitted the cryptomarket rules and regs layout to the G20 at the start of the week.

Reports indicate that there was nothing particularly damming in the initial proposal to suggest a material shift in the cryptomarket regulatory landscape, which has continued to evolve through the year, with exchanges having already rolled out KYC and anti-money laundering policies and procedures along with other reporting measures.

Supporting the upward trend was the FSB’s view that “crypto-assets do not pose a material risk to global financial stability”, while acknowledging that there is a “need for vigilant monitoring in light of the speed of market developments”.

While the general view is upbeat, there are few details on how crypto-assets will be classified as an asset class, the classification deciding under which regulatory authority the respective cryptocurrencies and exchanges will fall under and, under what tax code crypto-assets will be classified, though at this current juncture, the regulatory oversight element will likely have a greater bearing than taxation, which was already introduced during the previous tax year, in key jurisdictions at least.

Get Into Cryptocurrency Trading Today

At the time of writing, Bitcoin was up 1.48% to $7,428, with an early moving seeing Bitcoin break through to $7,500 levels with a morning high $7,561.9 before pulling back to $7,400 levels, the morning’s move leaving the first major resistance level untested early on, with the morning’s downside a start of the day $7,319.6 steering well clear of the first major support level at $6,829.63.

Of greater significance through the early hours has been a hold above the 23.6% FIB Retracement Level of $7,076, leaving the bearish trend reversal intact following Tuesday’s break through to $7,000 levels.

For the day ahead, a move back through to $7,500 levels would support a run at $7,600 levels though the day’s first major resistance level at $7,647.53 may be left untested, with Bitcoin likely to face plenty of resistance at $7,600 levels on the day, a consolidation at $7,400 levels supporting a move through to $7,600 levels in the week to bring $8,000 levels into play for the first time since 23rd May’s $8,020.

Failure to move back through to $7,500 levels could test investor appetite later in the day, with a pullback through the morning low $7,319.6 bringing sub-$7,200 levels into play, while we would expect sub-$7,000 support levels to left untested through the day, barring materially negative news hitting the wires that could derail the shift in sentiment across the market.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.