Bitcoin bulls are expressing cautious optimism over conditions in the bitcoin markets, after prices broke through the $7,000 barrier on Tuesday.
Reversing the sideways and downwards pressures of recent weeks, markets traded up, even reaching three-week highs on the Bitfinex exchange, at $7128. However, some analysts have said they remain cautious, warning of the risk of a pull-back over the next 24 hours.
The price highs mark a continuation of the ongoing trend since August 14, which has seen prices recover from $5895. However, with a 21% surge over the last 14 days, some analysts have suggested that BTC could be due a slight correction downwards.
At the time of press, BTC was at $7,026, down 0.77% on the day.
Omar Godbole at CoinDesk.com said that while traders should be wary of a correction in the next 24-48 hours, analysis indicates the longer-term rally in prices will recover.
“Close proximity to a key resistance zone and short-term overbought conditions call for caution on the part of the [BTC] bulls. The leading cryptocurrency jumped to a three-week high of $7,128 on Bitfinex yesterday and closed well above the 100-day moving average (MA) hurdle, signaling a continuation of the rally from the Aug. 14 low of $5,859.”
“However, the 21 percent price rise witnessed in the last two weeks is looking overstretched, as per the short-duration technical studies. As a result, BTC may have a tough time scaling the immediate resistance zone of $7,160–$7,180 in the next 24 hours and could suffer a minor pullback before extending the ongoing rally.”
While the market shows signs of return to more prolonged growth, prices are still below the July high of $8,507. While markets seem to have brushed off the latest failed ETF proposals, BTC/USD futures shed 4.7% in trading yesterday, which might suggest ongoing downwards pressure over the medium term.
While bitcoin seems to have seen less volatile price movements in recent weeks, the cautious optimism will nevertheless feel like a welcome reprieve for bitcoin bulls hoping to recover the ground lost since July.