After breaking out from a reverse head and shoulders pattern and setting a new all time high of $1760 on Bitstamp, Bitcoin has slightly calmed down as its price pulled back 2%. What does the future hold for Bitcoin’s price? Keep reading to find out.
Some traders see this as the market meeting the 61.8% Fibonacci retracement level, which is right around the $1740 area. As discussed in our previous bitcoin analysis article, since Bitcoin is currently trading in uncharted territory, the only somewhat reliable indicator is the Fibonacci retracement. Rest assured that Bitcoin’s price won’t stay at this level for long. Currently the price is at a critical point in the Fibonacci indicator, and traders will either use it as resistance or support to decide the next market action.
Another metric to keep an eye on is the RSI (Relative Strength Index). Currently it is booming at 89 out of 100, anything of 70 means the market if overbought. However, during this rally the RSI hasn’t been of much use since it showed an overbought market since late April, when the price was only at $1400. As long as the volume stays high, there will be enough fuel to keep this rally going, otherwise if bitcoin trading volume starts dying down, the price might too.
Reasons for the Rally?
As a recap, the common speculation as to the current price hike is Japan’s adoption of the cryptocurrency and political tensions between the east and the west. Another reason Bitcoin’s price is so high, is the approach of the SEC’s appealed Bitcoin ETF decision date. In fact, the SEC is supposed to make a decision on May 15h regarding the application.
Let me remind you what happened two months ago when the price also rose to incredible heights days before the ETF decision, only to dump back down after the SEC denied the application. The agency’s reasoning behind their decision was that Bitcoin markets weren’t regulated enough.
While its nice to see traders remain hopeful about a positive outcome on the appealed application, the reality is that nothing has really changed in 2 months regarding Bitcoin regulation in the US. Moreover, any application for an ETF is allowed a second chance at reconsideration, so the fact that the SEC is reviewing the Bitcoin fund once again is not anything special.
If you are holding a position in Bitcoin one thing is for certain, when the SEC makes a decision the price will move heavily in either direction. Make sure to mark May 15th on your calendar as you wouldn’t want to miss that.
Dislaimer: This is not trading advice, this article is for educational purposes only. If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.