Bitcoin is in danger in falling through 7,000 as it struggles to recover from the overnight battering from a whale-induced flash crash.
Hopes that the leading digital currency would shrug off the apparent sale of $35 million worth of bitcoin (5,000 BTC) on Bitstamp has so far proven to be misplaced optimism – hopium you might say.
Nevertheless, the probability of a weekend rally is high going by recent events.
Although there can be a tendency to veer between elation and pessimism by market participants buffeted by such violent volatility, Bitcoin is still priced some distance higher than where it was about two weeks ago as it then struggled to break 6400.
Also, on the one-day BTC/USD chart Bitcoin is comfortably out of sight of the 200-day moving average at 4600.
The price is also being hit by profit-taking as traders look to pocket their gains and weak hands bail.
Those holding to a bullish view will see a buying opportunity at these levels. This could be the moment when the “buy the dip” mantra kicks in, with each retrace a prelude to attemptsnon new highs for the year.
Today was bitcoin’s biggest intra-day move of the year, touching $1,500, depending on which exchange data is followed.
Gary has been writing about cryptocurrencies since 2013 and currently works as the cryptocurrency analyst at interactive investor, the UK’s second-largest online investment platform. Gary contributes for Coin Intelligence News in a personal capacity and none of his commentary should be considered investment advice. Gary is the winner of the ADVFN International Financial Awards 2018 Cryptocurrency Writer of the Year. Contact Gary on twitter at: @gary_mcfarlane