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Bitcoin Hits Another New All-Time High Near $8400, What’s Next?

Bitcoin started biting at the $8000 level a couple of weeks ago, but fell back to its previous support, at around $5,600 – scaring lots of newer investors, not used to the volatility and flux of the cryptocurrency markets. Lots though, took advantage of the opportunity presented by the fall, to get into the market for the first time, and they have been rewarded for their optimism. Bitcoin broke another all-time high at the start of this week and yesterday was trading at $8380 which holds as the new record high.

Bitcoin Daily Chart
Bitcoin Daily Chart

Bitcoin is being invested in by people who are not really used to investing. Because of this, the price structure seems to be congregating around the “round thousand” levels. $5,000, for example, remains a huge psychological support level. It is to be seen whether $8,000 becomes another $6,000 resistance level, which took some time to overcome. Another “biggie” lurking in the future, is, of course, the $10,000 level. We believe this will make or break bitcoin. If it can reach, surpass, and sustain $10,000, this will put a lot of the arguments about it being an illusion, as a serious financial instrument, to bed.

For the moment though, this $8,000 level is the one to concentrate on. Chartwise, on the daily chart above, the price has cleared the 21-day EMA comfortably now and is just passing the $8,000 level. Bitcoin is trading at $8264 at the time of writing and holds close to record highs levels. This, of course, is the first sign of it gaining momentum towards the $10,000 target.

Last week, the 55-day SMA acted as support at the previous level of around $5,600. At this retesting the price was quick to bounce off of it and resume upwards – with the $7,000 level presenting no difficulty this time.

The pulse signal has been positive for the past three days – and has become stronger each time. There is a caution though. The positive directional indicator (green line) is fairly flat around the 30 mark, and the 14-day ADX, itself, the blue line, is also flat and giving no clear direction. We have a divergence signal indicates that this is a “heads up” about a possible change of trend – and this may well be downwards. Until a clearer signal is shown, we need to be alert to the possibility of another retracement back to the £5,000 dollar level. Again, depending on the momentum of this, it could be another opportunity to buy, in the right circumstances.

So much for the technicals – on the fundamental front bitcoin is making news because of a hack, resulting in a $31 million theft from Tether, a cryptocurrency firm. It is thought to be the result of an external source breaking into the network, which uses Polonix, Bitfinex and other exchanges.

The consequences of this news are only just being digested by a market which has been sold on the impregnability of the blockchain and the transparency and openness of its dealings. This could be an Achilles Heel for the crypto world. It remains to be seen whether Tether can contain the damage by “locking” the use of the stolen tokens by encryption and blocking tactics.

Meanwhile, the first listing of bitcoin futures is expected on CME in mid-December. This will boost confidence in cryptos – having the backing of institutional investors has to be a comfort to a market which has never fully shaken the idea that it is a tool of the more shady enterprises out there in cyberspace.

Noble Gold specializes in IRAs and 401(k) rollovers through precious metals and cryptocurrencies investments.

This article was originally posted on FX Empire

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