f there is anything worth talking about today, it surely is the crypto space. Bitcoin has crossed the $7K and it is trading near $7,500. Year to date, we are still down by -47.85% but the $600 move in one hour (yesterday) was a remarkable one. The sellers in the OTC market are holding off their Bitcoin as they believe that the price is going to go high. On the other hand, buyers are eager to find sellers so that they can buy low and sell high.
The question is what has instigated this move?
As we said yesterday, the suppressive bear market conditions are fading and with yesterday’s move (especially if the momentum continues at this pace), it will be only a matter of time that everyone would completely forget about the bear market altogether. Remember, the FOMO (fear of missing out) element for Bitcoin is very strong and it drives the trading action aggressively. Regulatory space is becoming more digestible for cryptos, countries like Japan which has shown a lot more tougher attitude towards cryptos in the past are becoming friendlier. For instance, SBI, a major financial firm in Japan, opened its crypto exchange for traders says it all.
But to narrow down the focus on a specific event which triggered this move is; Blackrock, the world’s largest exchange-traded fund provider and asset manager is also thinking in venturing into the world of cryptos. When Goldman Sachs announced its crypto trading desk, we did see that their competitors are not going to be reticent. Of course, these bigger institutions have not had the chance to enjoy crypto parties yet and now they are on it. Although, the CEO of Blackrock didn’t fully back the rumours after the report, but it absolutely makes sense that the world largest asset manager would dive into the crypto world because now we are at a stage where one can actually use various techniques to form valuations on cryptocurrencies.
Another event which is worth keeping an eye on today is the Congress discussion on crypto. The House Committee on Agriculture and Financial Policy Subcommittee both would discuss the digital assets and cryptocurrencies as money. Any positive stance by them towards cryptos would have the potential to fuel the crypto rally further.
In terms of technical analysis, the next major resistance for Bitcoin is $7,749, the high of 7th of June. On a daily time frame, the price is having a battle with its 100-day moving average which is at $7,495. The 200-day moving average is trading at $9,575 which would serve as a next resistance. Of course, the price would have to clear the psychological level of $8,000 first before targeting the 200-day moving average.
In terms of volume, it has reached a 3-month high as the price has taken out the $7K mark, this tells me that the current move is here to stay because of serious conviction behind it.