- Bitcoin has been moving in sync with risk sentiments.
- Ripple's XRP pumped hard on the Binance announcement.
- BTC/USD failed to break free from the wedge formation.
This has been a volatile week for the cryptocurrency market. Bitcoin (BTC) jumped from $7,342 on Monday, January 6 and hit a two-month high of $8,464 by Wednesday, January 8. Thus, the first digital coin gained over 15% of its value in less than three days. However, in the middle of the week, the tide changed and BTC slipped back below $8,000 to trade at $7,660 on Friday.
At the time of writing, BTC/USD is trading at $7,960 with nearly 2% of gains since the beginning of the day. The coin has resumed the upside trend amid goring volatility ahead of the weekend. Bitcoin's average daily trading volume is registered at $25 billion, while the market dominance rate has settled at 68.4%.
Iran airstrikes and other events
Whether Bitcoin is a safe-haven or not is the key discussion topic of the week. Following the US airstrikes on Iran and the killing of Iranian military leaders, the cryptocurrency market has been moving in sync with assets such as gold and Japanese Yen, which gave rise to an idea that Bitcoin has become a safe-haven. This theory has found a confirmation later during the week when de-escalation of Middle East tensions led to a sharp growth of stock markets and triggered Bitcoin's downside correction.
While the correlation between Bitcoin and risk sentiments seems to be obvious, some cryptocurrency experts do not buy this safe-haven story. They, not that Bitcoin is too volatile and unpredictable to be used as a store of value during periods of high uncertainty. This point of view is shared by a prominent cryptocurrency analyst Alex Kruger, who pointed out that Bitcoin actually fell right after the strikes and started gaining ground only a few hours later.
Apart from airstrikes, there were some other factors that might have triggered Bitcoin's price increase, such as the sudden growth of Tether market value on CoinMarketCap and the China blockchain announcement.
Ripple's big moment
Ripple's XRP has attracted a lot of attention this week. The coin experienced a sudden growth of value, triggered by the news that Binance added it to the list of instruments available for marginal trading. The customers of one of the world's biggest exchanges now can trade Futures on XRP with up to x75 leverage.
Some traders suspected insider trading as thee token started growing before the official announcement; however, the head of the exchange Changpeng Zhao denied thee accusations and noted that more top coins would be added to the platform in the nearest future.
BTC/USD: technical picture
From the technical point of view, BTC/USD attempted to break from the descending wedge formation but failed to gain enough momentum. The price reversed from the upper boundary of the wedge, reinforced by 50% Fibo retracement for the upside move from December 2018 low to July 2019 high. The failure increased the downside pressure and pushed the price below a critical $8,000. However, BTC/USD managed to stay above SMA50 weekly (currently at $7,690) and returned to the area above SMA100 daily ($7,950), which is a good signal.
At the time of writing, BTC/USD attempts to settle above $8,000. If the breakthrough is sustained, we can see a further recovery and another attempt at the above-said critical resistance created by a wedge formation.
On the downside, if $7,650 gives way, the sell-off may gather pace with the next focus on $7,350. This support area is created by SMA50 daily. Also, it is a former resistance that limited BTC recovery at the end of December. Once it is out of the way, the downside momentum is likely to gain traction with the next focus on $7,150 (61.8% Fibo retracement) and psychological $7,000.
BTC/USD daily chart
The Forecast Poll of experts has worsened slightly since the previous week. The expectations on all timeframes are bearish now, despite the improvement of the forecasted price levels. The average price forecast on all timeframes remains well below 8,000. Notably, the quarterly price forecast is lower from the current price, which means that the experts are cautious about Bitcoin's recovery perspectives.
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