A recent report in the Digital Journal on May 1 showed bitcoin’s price drifting back down below $9,000 but today things have turned around again and the price appears to be recovering ground. However, so far it has been unable to break out and reach the $10,000 level.
Condesk’s May 2 analysis
A week ago Wednesday, there was a bearish outside-day candle, a bearish sign showing the rally from the low of $6,425 was ending. However, there was no follow through on Thursday and the price remained over $8,800 over the weekend. However, so far even this Thursday there is no break through the $9,500 level.
The four hour chart shows bitcoin trading in a narrow price range with higher lows and lower highs, This forms a bullish pennant pattern. A bullish breakout would mean the rally from $6,425 has resumed and could open the way to a test of $12,000. However, a more modest readout would see the price rising to $10,000.
A downside break could see a pull back to around $8,490. The odds however are for the bull-pennant breakout as indicated by the daily chart. The daily chart shows the gradually ascending 5-day moving average (MA) and ten-day MA favor the bulls.
Coindesk’s prediction: “Bitcoin will likely witness a bull-pennant breakout and rise towards $9,975 (200-day MA) and $10,000 (psychological hurdle). A daily close (as per UTC) above $10,000 could bring a stronger rally to $11,306 (38.2 percent Fibonacci retracement of the sell-off from $19,891 to $6,000).A downside break of the pennant pattern would weaken the bulls and expose support lined up at $8,490 and $8,104 (50-day MA).Only a daily close below $7,823 (April 17 low) would signal bear revival.”
The bearish scenario did not come to pass but neither did the high close above $10,000. A less ambitious rally appears to be in the making but there are still almost nine hours left in the day.
The present price situation
Bitcoin opened on May 3 at $9,219.86, at least above the $9,000 level. It high so far has been $9,451.42, closing in on the $9,500 mark. Its low was $9,162.19, still clear of the $9,000 hurdle. At 15:00 UTC the price was $9,430.84 up about 2.35 percent on the day or over two hundred dollars.
Goldman Sachs moves to set up a bitcoin trading operation
One factor helping boost the price may be that the giant finance company Goldman Sachs is forging ahead with plans to set up what appears to be the first bitcoin trading operation at a Wall street bank.
While most big banks are avoiding the cryptocurrency market the Goldman Sachs’ move will lend legitimacy to virtual currencies.
The bank will not directly trade in actual bitcoins but will use its money to trade with clients in a variety of contracts linked to the bitcoin price. However a bank team is also looking at actual trading in the coins.
Rana Yared, one of the executives overseeing the trading operation said: “I would not describe myself as a true believer who wakes up thinking Bitcoin will take over the world. For almost every person involved, there has been personal skepticism brought to the table.”
UPDATE: As of 19:10 UTC the price had broken through the $9,500 level and was at $9,667 after reaching a new high earlier of $9,726. Present price can be found here.
