Following two weeks of a bloodbath in which the largest cryptocurrency lost more than 43% of its value, Bitcoin (BTC) has staged an overnight recovery and trades back above $4,000 again. The coin is 18% up on the recent swing low, which is $3,657 (Bitfinex data).
The biggest digital coin is on the track for the biggest daily gains in the last four months.
On Tuesday, the Chairman of Securities and Exchange Commission (SEC) Jay Clayton said that bitcoin ETF wouldn’t be approved until key improvements have been made in regards to market manipulation.
“Those kinds of safeguards do not exist currently in all of the exchange venues where digital currencies trade,”
Clayton said, speaking at the CoinDesk’s Consensus Invest 2018 conference in New York.
Looking at the weekly chart (Graph 1), the price has approached the key support, which is located around the $3,000 mark. However, it didn’t manage to touch the support zone since it reversed back higher from the level of $3,650. The $3,000 level represents a confluence of support – 200WMA, currently at $3,151 and the key horizontal support (the blue line).
Graph 1. Bitcoin (BTCUSD) weekly chart
The daily chart (Graph 2) offers a similar scenario. Once the price breached the support around $6,000, the following move happened without a greater level of resistance. Currently, BTC is testing the horizontal resistance (the former support) and the 127.2% Fibonacci extension support, but now in the form of resistance. A break above this confluence may facilitate a move back to the previous battlefield which was around the $6,000 mark.
Graph 2. Bitcoin (BTCUSD) daily chart
On the other hand, the failure to regain this level around $4,300 will likely result in a new swing lower, and even possibly a test of the big support at $3,000.
The current market price, according to Bitfinex, is $4,253 while the market capitalization has increased to $73.5 billion.