The king of cryptocurrencies Bitcoin is extending gains after a 46% rally in just two weeks. Since April 10, BIT/USD rose more than $3,000 in value from $6,650.00 to Wednesday’s fresh highs around $9,767.40. Bitcoin is now on its way to test the 200-day moving average at $9,835.
Market experts are seeing the surge in Bitcoin as a response following the 400-point drop in the Dow Jones on Tuesday.
Equities traded weaker the second day of the week as investors were focusing on the US benchmark Treasury yield at 3%. Also, some dovish outlook from Caterpillar added pressure to markets.
But the cryptos market is currently on the opposite as experts are welcoming news that Goldman Sachs hired trader Justin Schmidt to be the first head of digital asset markets in the company’s securities division.
Goldman Sachs spokeswoman Tiffany Galvin-Cohen said that the move is “in response to client interest in digital products.”
Another news that is fueling the Bitcoin’s rally is a survey from Thomson Reuters that found that one in five financial institutions are considering cryptocurrency trading in 2018.
The survey says that 20% of the 400+ participants stated they are “really interested and actively exploring” crypto trading operations over the next 3-12 months window. According to a Thompson Reuters press release, “this indicates that cryptocurrency trading is more of a 2018 project than something longer-term.”
Finally, 16 cryptocurrency companies in Japan announced a joint self-regulation organization to restore market confidence after the hack in January that stole $500 million of NEM tokens from the Coincheck exchange. According to Taizen Okuyama, group chief, the project wants “to work to restore public confidence in order to develop a healthy market.”
Bulls are reclaiming the control of Bitcoin
After collapsing nearly 70% of its value from all-time highs at 19,890 in December 2018 to lows at $6,000 on February 6, BIT/USD attempted to recover ground, but the bounce was capped around the 11,765 area, and the unit was launched back to $6,500 early in April.
According to the experts, most of the collapse was triggered by tax-related selling, regulatory-related headlines, and the big short influenced by the US opening to Bitcoins. However, the hangover is over and the Bitcoin bulls are taking over.
Bitcoin consolidated around $6,500 in the first week of April and jumped wild the next weeks. BIT/USD rose 20% last week and 46% since April 10. However, it is still nearly 30% down on the year.
BIT/USD is currently trading around $9,600, almost flat on the day. The pair is trading above the 100-day moving average for the first time since January; but it seems that a significant cross between 20 and 50 days moving average is going to happen soon, signaling further gains.
Above that, the 200-day moving average at $9,836 looks like the most important frontier for the Bitcoin bulls. In fact, BTC/USD is currently testing it for the second day in a row.
If the cryptocurrency manages to break above the 200-day MA, it will test the critical $10,000 level before going to the dynamic resistance around $11,200. Then, the real battle will take place at the $11,780 area, February and March highs.
To the downside, a rejection of the 200-day MA would mean a retest of the $9,000 level before going in full force for April’s lows.
However, it seems that market sentiment is again favoring Bitcoin bulls.