Cryptocurrencies saw an increase in investment in June with $12 billion worth being pumped into the market. The increase was due to the bullishness of investors towards cryptocurrency markets in general, as well as blockchain research.
An article on Medium states that 77.9% of investors who were surveyed in April believe that cryptocurrencies will rise by more than 30% in the next 3 years, while 55.6% said that they were optimistic about blockchain’s future.
The bullishness of investors led to a short-term Bitcoin (BTC) price increase. The BTC/USD pairing is currently trading at $6,757, slightly above the 50 period 4-hour Exponential Moving Average (EMA50). Bitcoin’s current position makes it easy for the cryptocurrency to move upwards if bullishness continues until August.
In the short-term, Bitcoin may fluctuate between the $6,705 – $6,850 price mark before it moves to the 4-hour EMA100 and settles in the $7,000 – $7,050 range.
Above the current price, the BTC/USD pairing will have some resistance between the $6,749 level, as well as the $6,796 level. The recent string of hackings online exchanges experienced this year have made investors wary, which saw the price of Bitcoin drop by 10%. The most recent hacking was experienced by South Korean online exchange Coinrail. If Bitcoin breaks out of the $6,796 level, the cryptocurrency will have little resistance and will reach the $7,100 mark.
The volatility of Bitcoin over the short-term is good for spread traders. Nadex outlines that Bitcoin Spreads have a larger tick value of $0.10 per point of the underlying index. If Bitcoin continues to become bullish in the short-term, and breaks the $7,100 mark, traders who placed a buy option above $7,000 will see good returns on their investments.
The $8,000 price mark is currently the short-term ceiling for Bitcoin, which coincides with the 50 day EMA. The $6,000 price, on the other hand, is the cryptocurrency’s support level. If Bitcoin breaks this level then it should be considered as a huge sell signal. Bitcoin has seen lower values in the past few weeks, which is worrying. However, as long as Bitcoin holds above support, investors should not be worried about the prices declining sharply in the succeeding weeks.
If bearishness, however, ensues due to economic factors such as another online exchange being hacked, Bitcoin may lose the support it got from the EMA50. If that happens, the prices will go back to the $6,600 mark before retesting support at $6,400. Below the $6,400 mark, Bitcoin will enter into a full bearish state where it may even break the resistance at $6,000.
The price movements of Bitcoin over the last few days have shown investors that there is a strong support for the $6,300 price in the market, and it will most likely be Bitcoin’s support in the next few weeks. Traders will watch the price action closely for signals on the recommencement of a bull trend.
This is a contributed post written exclusively for Tomluongo.me
AUTHOR BIO: Jennifer Martin
Jennifer is a financial consultant living in Japan. Before she decided to work abroad, she worked as an accountant for a law firm in New York. In her free time, she likes eating takoyaki in the streets of Osaka.