Bitcoin stays around $6,550, where next? Mike Novogratz and Mohamed El-Erian share their views

Bitcoin touched $6.576 during early Asian hours before retreating to $6,550 by the time of writing. The digital coin No.1 has gained 2.4% on a daily basis but stayed mostly unchanged since the beginning of Friday. BTC/USD managed to stay above critical $6,000 handle during the recent slump, which gave some hope for a sustainable recovery.

A famous Bitcoin investor Mike Novogratz believes that the market has bottomed, and now the recovery is on the way.

"This is the BGCI chart...I think we put in a low yesterday, retouched the highs of late last year and the point of acceleration that led to the massive rally/bubble... markets like to retrace to the breakout..we retraced the whole of the bubble." he said in his Twitter account, attaching Bloomberg Galaxy Crypto Index (BGCI) chart to the post.

Meanwhile, Allianz chief economic adviser Mohamed El-Erian says that Bitcoin's fair value is $5,000 and the price will experience another boot of downside correction. However, he admits, that crypto is going to be widely adopted by both the private and public sector.

“In terms of crypto, what we’re getting is the realization that adoption is not going to be as big and as quick as the proponents of crypto would like,” he says. “I think it’s going to be there, it’s going to last for a long time, it’s going to play a role in the ecosystem, but it’s not going to be the currency that a lot of proponents would like it to be.”

Bitcoin's technical picture

BTC/USD broke above $6,530 (23.6% Fibo retracement weekly that stopped the recovery on September 7) and now moved towards $6,600. Once this resistance is cleared, the upside movement will take the price to the short-term target at $6,800 (23,6% Fibo retracement) and $7,000.

On the downside, BTC is supported by $6,500. This area is followed by $6,340/50 (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