2018 has witnessed a panic-inducing price drop for bitcoin. Ethereum is nearing the death cross, and many more alt-coins are currently making investors sweat with the possibility of a near-death event. However, the prices of the cryptocurrency jumped by over $1,000 in just 60 minutes yesterday, after trading sideways for more than two weeks straight.
The currency reached $8,055, its two-week high but soon fell beyond $7,850 as reported by CoinDesk. This helped the currency gain over 13 percent on its previous days’ close of $6,939. Sources suggest that the sudden jump in prices could be because of the liquidation of short sell positions in the market.
Precisely, the prices picked up at 7 am GST when they were trading at $6,766. After this, it reached the $7,000 mark by 11 am GMT. This triggered several stop loss positions on short trades, because of which prices went up quickly. The technical buyers jumped into the slight upward trend at $7,000, helping figure an upside break on the falling wedge pattern. After the two-hour slow movement upwards, the prices suddenly jumped by $1,000 within 45 minutes.
Such a price movement can be expected when a currency has not shown any considerable upward or downward movement for long. This helped the upsurge become aggressive as well as speedy. If the currency is able to move upwards and close at more than $7,510 in the upcoming days, a double bottom breakout could be expected, and the next move will lie around $8,500.
Some trade experts are skeptic about this upsurge and call it a purely technical game, with no fundamental reasons to support the price rise. The near 15 percent rally in a matter of an hour, could help the currency push back against the December down trend that has haunted traders for nearly a quarter. Therefore, technical analysis shows a small bull reversal pf price.
The upside targets for the currency have been fixed by the traders. The first target will come into effect at $8,420, and a Fibonacci retracement could be close by at $9,385. The low of February 6 came at $5,932, one of the most painful moments of the currency this year. However, the overall market support lands at $6,400, showing a strong strength in bull patterns and signaling a strong relative strength indicator. This means that prices will continue to rise soon.
Experts also warn the traders to walk through this phase patiently. At the beginning of March, the currency experienced a similar strong breakout, only to make the prices plunge further down the charts. If bitcoin is able to reconsolidate and reach at least $7,700, then we can expect a long bullish run too.
In the meanwhile, a team of Bank of America Merrill Lynch has openly shown their disinterest in the cryptocurrency, calling it one of the greatest asset bubbles in history. With regulatory pressures, government crackdown and several frauds unveiling every day, it will be interesting to note if bitcoin picks up.