During the recent week, Bitcoin gained momentum and climbed above $4000 for the first time in six weeks. Over the past week, Bitcoin gained approximately $700 to its value.
But what comes fast goes away fast. The bulls walk up the stairs – bears jump out the window.
In the last 30 minutes, Bitcoin lost over $400, and as of now trading for around $3800 (Bitstamp), with a market cap of under $68 billion, after reaching a daily low of $3700 (as of writing this). This is roughly $500 away from the daily high, reached this morning, at $4190.
Is this a momentum change? Are the bears back?
In our recent Bitcoin price analysis just from hours ago, we’ve mentioned that Bitcoin had reached a significant resistance level of $4200. After touching it, BTC got rejected and following some consolidation, and then the ‘ugly’ dump came across.
In the following daily chart, we can see that Bitcoin found support on the lower ascending trend-line of the ascending channel (marked in orange). The RSI indicator, which encountered resistance of 76 levels, had turned bearish and is currently re-testing support on top the descending long-term trend-line.
Breaking down the ascending channel, marked in orange, could be a disaster for the short-term of Bitcoin’s price. Another thing is to keep eyes on is the BitFinex open short positions chart. The past price manipulations came from it. As of now, the short positions had broken down the long-term support line.
Another thing to keep in mind is the weekend behavior. During weekends, many traders are away from trading. Hence, it’s pretty easy to make price manipulations. This happened yesterday when Bitcoin topped $4000, and apparently this is happing today (Sunday) as well. It will be interesting to see what waves Monday, the beginning of the week, will start with.
So is it time to buy Bitcoin? We have recently discussed this exciting topic in a separate article.