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The rally in Bitcoin and other cryptocurrencies over the past two weeks has been at a steady and progressive pace and the weekend capped off a push past the technically-important US$45,300 level of resistance, which had been a major hurdle for a reversal in the benchmark cryptocurrency.
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Cryptocurrencies have gained alongside broader increases in U.S. equities, with the latter having enjoyed two consecutive weeks of gains.
The weekends are a time to relax, kick back and maybe spend some time trading cryptocurrencies because that’s when all the action happens.
Cryptocurrency markets are 24/7 and so the weekends, when human traders tend to be away from their terminals (the vast majority of trading is still led by humans), is also when volume tends to drop off and swings in either direction tend to be amplified.
That was apparent yet again this weekend, except that volumes were elevated.
To be sure, the rally in Bitcoin and other cryptocurrencies over the past two weeks has been at a steady and progressive pace and the weekend capped off a push past the technically-important US$45,300 level of resistance, which had been a major hurdle for a reversal in the benchmark cryptocurrency.
In Asian trading Bitcoin rose to as high as US$47,300 before retracing to now settle at around US$46,800 at the time of writing (GMT 0200).
Bitcoin is now up just over 1% for the year, compared with a 4.7% decline in the S&P 500, which until fairly recently, it was strongly correlated with.
Fibonacci extensions, a popular technical analysis tool, suggests that US$50,450 and US$54,000 could now be in play.
Bitcoin has traded a tight channel as major central banks took a hawkish turn to cater to rising price pressures and there are expectations that tighter monetary policy will meet less monies available to more risky assets, including cryptocurrencies.
Cryptocurrencies are also coming under greater scrutiny by regulators based on allegations that they have been used by Russians to circumvent Western sanctions, but the blockchain data seems to refute such claims.
Cryptocurrencies have gained alongside broader increases in U.S. equities, with the latter having enjoyed two consecutive weeks of gains.
Bitcoin is now treading the upper end of its trading range, which for other assets would typically see a reversal, but in the case of Bitcoin has often led to fresh highs, with overbought levels historically leading to further gains out over the next year.
