Bank of Spain lambasts Bitcoin amid strong recovery on the cryptocurrency market

Bitcoin spiked to $3,994 during early Asian hours and even touched $4,000 at some exchanges. While the coin retraced to $3,884 by the time of writing, it is still 5% higher from this time on Monday and 7% since the beginning of the week.

A sustainable move above $3,700 handle set the bullish ball rolling and put $4,000 back in focus. This is an intense psychological barrier, but once it is cleared, the upside may be extended towards the highest level of the year at $4,127 and to $4,200.

On the downside, a short-term correction from the overbought territory may take the coin to the former resistance $3,700. Now this area serves as strong support with SMA50 (1-hour and SMA10 4-hour located right below). The next critical barrier is created by a confluence of technical indicators at $3,600 (SMA200, 1-hour, DMA50, SMA50, 4-hour).

Meanwhile, another central banker came out to the fore with critical comments about Bitcoin. Carlos Colesa a Deputy General Director for financial innovations in the Bank of Spain said that Bitcoin could not be regarded as a solution for the problems of existing payment systems. 

He pointed out to a relatively small number of daily transactions as compared to traditional systems, and a slow process of transaction confirmations. He believes that the Proof of Work concept where miners have to approve transactions have more drawbacks than benefits.

“It is unlikely that Bitcoin in its current modification will have any significant impact on the finance sector as an alternative to traditional payment systems,” he concluded.