Godbole’s analysis
Writing on CoinDesk yesterday Omkar Godbole gave an analysis of bitcoin’s price movements yesterday. He notes that just a day before breaking $10,000 bitcoin was under bearish pressure below $7,500. Analysts were busy predicting an even deeper drop courtesy of what they saw on the charts as a death cross as the price dropped below long term moving averages.
However, early on Friday bitcoin picked up a bid around the $7,500 level and had risen to $8,800 by 17:20 UTC. After consolidating in the $8,500 to $8,700 range for a few hours bitcoin jumped to highs above $10,000 early on Saturday.
Death cross trapped sellers were on the wrong side of developments for the fourth time since 2014.
Big gains
Bitcoin closed (UTC) on Friday at $8,662 over a 16.5 percent gain on the day. This is the largest single day hike since back on April 2. On that date BTC rose 18.45 percent from $4,133 to $5,080. The jump from below $7,400 to above $10,300 is the third largest 24-hour price gain in BTC history.
Possible cause of the gains
Some experts see the gain as a result of Chinese President’s XI Jinping’s comments that China should accelerate its adoption of blockchain technology. China was one of the largest sources of demand for cryptocurrencies during the bull run of 2017.
Prominent observers such as Anthony Pompliano believe that Jinping’s public support of blockchain technology will force the US and other major nations to also embrace the technology giving a possible boost to bitcoin.
The investor community expects the rally to continue.
Some doubts
Some analysts think the optimism is a bit premature. They note that China is developing a digital version of its own currency and has yet to lift its ban on bitcoin and other cryptocurrencies.
As if to follow the doubts the price of BTC fell from its highs later on Saturday. However, if prices find acceptance above $9,750 Godbole believes a bullish breakout would be confirmed.
Chart analysis
The daily chart does show early signs of reversal. The move above the Oct. 21 high of $8,352 invalidates the bearish lower highs setup. BTC also broke through the resistance at $8,820. BTC has yet to exit the falling channel of the trend-lines connecting June 26 and Aug 6 highs and July 17 and Sept. 26 lows. The breakout through the bearish channel above $9,750 is needed to confirm a continuing rally from the near $4,100 low of April 2 that will retest the high of $13,880 reached last June.
Present situation
24 hours ago BTC opened at just over the $9,000 level at $9,029 according to CoinDesk data. Its high since has been $9,813 whereas it low was just $9,027. At 14:30 Central Daylight Time the price was $9,685 gain of $656 on the open or over 7 percent and just below the bearish channel breakout figure of $9,750. Perhaps later in the day the breakthrough will happen again.
The top twenty altcoins are following bitcoin all of them being in the green. The present price of bitcoin and the top twenty altcoins can be found here.
