Bitcoin bounces but volumes continue to struggle – BTC/USD above $7500
The price of the major cryptocurrency rose on Thursday helping to drag the smaller alt-coins higher with it.
Iota (IOT) was the top performer, bouncing as much as 13% while Ethereum and Bitcoin Cash enjoyed positive performances.
The big issue for a marketplace which correlates this strongly with the movement of one asset is that it makes following all the other coins virtually irrelevant as they are simply more volatile versions of the same asset.
Put simply when Bitcoin rises a couple of percents, Ethereum might rise 5% while Iota might rise 10% and likewise to the downside.
This is by no means a perfect example but it makes diversification almost impossible, and thus the need for stable coins like Tether which are very important for liquidity in cryptocurrency.
The technical analysis points higher for Bitcoin
The charts in BTC/USD continue to be rather confusing as the lack of volume takes significance away from any of market moves. Regardless of the lack of speculation, Omkar Godbole at Coindesk believes that the recent bounce may now indicate that the price could reach as high as $7800 over the next day or so, with the mid $8000 level within reach beyond that,
“Bitcoin will likely soon rise to $7,870 (descending trendline hurdle) in the next 24 hours. A high-volume break above that level would allow a re-test of the 50-day moving average, currently located at $8,522.”
Of course, it is not all good news, and as is usually his style, Mr.Godbole included a bearish eventuality, indicating how high the stakes are if this rally fails,
“Bearish scenario: The moving averages are maintaining a bearish bias, so a drop to $6,900 could be on the cards if the bulls fail to capitalize on the break above $7,500 and the price drops below $7,270 in the next 24 hours”
From my perspective, it is only a return of volume which can make me particularly interested in any moves that Bitcoin makes moving forward. A big slip seems possible in thin liquidity but these can be reversed quickly if volumes return. For that reason, it is binoculars for most big speculators who won’t be keen to actually get involved until some degree of uncertainty is lifted in a meaningful way.
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