Bitcoin loses momentum ahead of $6000, up more than $1000 on the week
|After making a decisive break through the $5000 mark yesterday, the BTC/USD pair extended its upside to a fresh all-time high at $5874 before going into consolidation. As of writing, the pair was trading at $5675, adding $235, or 4.3%, on the day.
On Friday, Coinbase, a major U.S.-based digital currency exchange, announced "We are excited to announce the ability for customers to instantly purchase digital currency using a US bank account. Previously, customers who purchased using a bank account had to wait several days before receiving their digital currency. Customers can now buy up to $25,000* and receive access to their digital currency immediately," giving extra fuel to the pair's rally.
Commenting on this recent development, "the Coinbase instant buy program is yet another step toward mainstream acceptance of bitcoin. This will make bitcoin easier to use as a transactional currency and could have the effect of increasing liquidity. The added transaction volume should also support the price," Brian Kelly, founder of BKCM LLC, a hedge fund managing digital assets, told CNBC.
Technical outlook
FXStreet analyst Omkar Godbole wrote "bitcoin's price suffers a corrective pullback every time the stochastic and the relative strength index (RSI) signal overbought conditions (marked by hand sign and red circles on the chart). The stochastic oscillator is a chart analysis indicator that helps determine where a trend might be ending. The trend line drawn from the July 16 low and Aug. 22 low and extended further is seen offering resistance around $6,100 levels. Though overbought, the RSI is still rising. Meanwhile, the stochastic is looking to retreat from the overbought territory. A technical correction would gather pace once the RSI starts losing altitude. A short-term consolidation around $5,800 or brief spike to $6,000 followed by a short-term pullback to $5,000-$5,300 looks more likely," in an article published on Coindesk.com.
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