Bitcoin price analysis: BTC/USD settled well above $6,500, "Not so fast!" experts say
|- Cryptocurrency market continues recovering from recent lows.
- Morgan Stanley helped improve the sentiments and push the prices higher.
- Jani Ziedins of CrackedMarket warns that the upside will be short-lived.
Cryptocurrency market staged a nice recovery on Thursday with Bitcoin gaining over 3% from Wednesday's levels. Currently, the digital coin No.1 is changing hands at $6,540 with a clear upside bias.
Morgan Stanley played into bull's hand
The market was already creeping higher when Morgan Stanley broke the news: the financial giant revealed that it was working on a solution that will allow investors to get “synthetic exposure to the performance of bitcoin.” This news was welcomed by the market and propelled prices even higher.
Morgan Stanley is not the only traditional bank with plans to tap cryptocurrency market. Recently, Citigroup and BlackRock revealed the plans to launch digital-asset related products, while Goldman confirmed its intent to create a trading desk for cryptocurrency instruments.
Not so fast
However, some experts do not buy into it, saying that the upside momentum will be short-lived and won't take us much higher.
“Bitcoin keeps slipping and is barely holding $6k support. Last week’s rebound to $7.4k is dead and gave us another lower-high since we failed to match the previous $8.4k bounce. Lower-highs tells us the next lower-low is just around the corner,” Jani Ziedins of CrackedMarket commented in his blog post.
The expert points out the shallow recoveries signal imminent breach of critical support levels.
“The trend is most definitely lower, but each bounce is still a selling opportunity. The worst is still ahead of us,” Ziedins added.
Bitcoin's technical picture
BTC/USD is knocking at $6,530 (23.6% Fibo retracement weekly that stopped the recovery on September 7). Once this resistance is cleared, the upside movement will gain traction and push the price towards $6,600. The ultimate short-term targets are $6,800 (23,6% Fibo retracement) and $7,000.
On the downside, BTC is supported by $6,500. Once below, the sell-off may be extended to $6,330 (SMA50 and SMA200, 1-hour chart), while the critical support is created by the upside trendline currently at $6,230.
BTC/USD, 1-hour chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.