Bitcoin extends recovery above $4000 as China's negative impact fades

Eren Sengezer FXStreet

After losing more than $1000 in the previous week, bitcoin staged a robust recovery on Friday and carried this move over to Monday as investors shrugged off China's decision to ban ICO's and efforts to shut down big virtual currency trading platforms. The BTC/USD pair reached a fresh 5-day high at $4084 today and is now consolidating its gains at $3990, adding $325, or 8.8% on the day.

On the other hand, citing its spokesman Brian Marchiony, Reuters reported that JPMorgan Chase & Co has been routing customer orders for bitcoin-related instruments, contradicting with the view of the company's CEO Jamie Dimon, who last week said that bitcoin was a fraud and would eventually blow up. “They are not JPMorgan orders, these are clients purchasing third-party products directly," Marchiony told Reuters.

Commenting on today's rebound, "other cryptocurrencies are experiencing gains today as well. The combined cryptocurrency market capitalization is currently at $137 billion, according to CoinMarketCap data, up from a low of below $100 billion just three days ago," CoinDesk author Daniel Palmar wrote in a recent article.

Technical outlook

With today's upsurge, the RSI indicator on the daily graph reached the 50 mark, suggesting that the bearish move is over. The first technical hurdle for the pair could be seen at $4220 (20-DMA) ahead of $4470 (Sep. 5 high) and $4700 (Sep. 3 high). On the downside, supports align at $3950 (50-DMA), $3670 (daily low) and $3240 (100-DMA).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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