Waking up to $5,160 on Friday morning must have left plenty of traders scratching heads after seeing the enthusiastic climbs earlier in the week, resulting in a brace of daring, yet albeit temporary breaches of $5,600 on Tuesday and Wednesday. However, despite the characteristically sudden and baffling nature of the drop, most observers had already laid bare their expectations of a sizeable fall ahead of the next cycle of activity. In fact, only a couple of days ago right here on express.co.uk experts had foreseen the possibility of a trapdoor amid their expectations that the world’s most well-known cryptocurrency would soon be challenging $6,000.
So, no shock, but perhaps some surprise that the hatch opened so suddenly. Alas, this is a not uncommon facet of crypto markets where the volatile ups and downs have much more contrast on their dials than traditional markets.
It does, however, end this very interesting week with two key points that will heighten the intrigue and fascination that most people involved with cryptocurrency feel acutely. Firstly, where does bitcoin go from here? And, secondly, are we in for another one of those curiously exciting weekends?
In terms of where this goes, bitcoin’s clouds are lined with optimism, and the general feeling seems to be that this latest dip is little more than a squatted bend of knees ahead of an almighty leap.
One of the key indicators here lies with the major altcoins (alternatives to bitcoin) which didn’t go with the spike earlier in the week. Instead, they chose to languish and travel sideways. Although, it was interesting to note that bitcoin’s main challenger – Ethereum – held hands with BTC as it tumbled later in the week, dropping to $150. It was only two weeks ago that ETH was looking strong and holding itself above $180.
This indicator matches patterns from 2017. Which, although interesting, must come with a warning for those expecting history to repeat itself – it seldom does in these markets.
If the history books are to be believed, though, the recent popular sentiment of a challenge for $6,000 and then a stealthy, Commando-esque crawl up to $10,000 is the script. But, at the risk of a repeated warning, it must be noted that bitcoin, Ethereum, Bitcoin Cash, Litecoin, XRP et al are masters of ad-lib. The script is probably still discarded on the floor backstage, completely untouched.
Which leads into the immediate prospect of what is shaping up to be a potentially extraordinary weekend.
These last two weeks have been largely about creating an almost bullish emotion throughout the markets. Some even dared to say the turning point had been reached and that we were, indeed, already in the early throes of a bull market.
The sensible – some may say “cautious” – analysists were reluctant to name it so, being firmly of the persuasion that a bear still runs the control room of crypto. It would, based upon very recent evidence, appear they were correct. The bears have beaten BTC back down, for now.
Nevertheless, there’s a certain inevitability about what may be the response over the coming days.
If recent weekend patterns are to be followed, we’ll see plenty of buy-in at the current levels and, no doubt, a steady rise across the weekend until the bears attempt to paw back any bullish activity into Monday morning.
What awaits beyond then should prove reasonably enthralling. The $5,350 line has been tested repeatedly, with a couple of nudges over $5,600. A drop back below $5,350 for a retest of trading volume was widely anticipated.
Bitcoin has dipped its toes in the water a few times now. We just need to watch and see if it’s ready to cannonball in for the big splash.
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