Yesterday Bitcoin fell below $3,500, but shortly afterwards it also rose as much as 5% to reach $3,800. Analysts suggest that this rise has both technical as well as fundamental importance.
It seems that there’s some strong resistance below $3,500 mark when it comes to Bitcoin’s price. That’s the reason why Bitcoin almost always bounces back strongly after dipping below $3,500. It had dipped below this mark on Monday as well, but soon after that it rose as much as 5% to rise up to $3,800. At the time of writing this article it’s trading around $3,700, up about 3.55%.
The uptick in Bitcoin’s price started when it had dropped to $3,480. While a drop below the strong psychological level of 3,500 could have triggered some strong selling, the real effect was exact opposite of it. What followed was some strong buying in the digital gold, thus making way for the quick recovery.
Other cryptocurrencies also followed shortly, with XRP, EOS and BCH rising as much as 12.5%, 5.6% and 9.7% respectively. According to eToro’s senior market analyst Mati Greenspan, this back to back bouncing above $3,500 right after the decline below this level reflects both technical as well as fundamental importance of this level. Given below is what he told Forbes:
“The support area between $3,000 and $3,500 is holding, just as we’ve been discussing these last few months. This development is likely to encourage buyers to come in the market, and it can cause Bitcoin to test higher resistance levels at $4000 and above.”
Those were Greenspan’s comments on technical importance of this particular level. However, he also commented on some other factors that may be driving this rally. And from his perspective, Bakkt’s recent acquisition of certain assets from futures commission merchant Rosenthal Collins Group was also a key factor behind this rally, as it shows the strong resolve and determination of Bakkt to proceed with its plans despite the delays arising from regulatory and other uncertainties. Given below are Greenspan’s comments on this particular development:
“Bakkt made a strategic acquisition today, which demonstrates their resolve to move forward.”
However, the overall sentiment for Bitcoin is still in the negative territory. Therefore, it will be interesting to see how things unfold today. In the meantime our Supreme Court is also set to hear the crypto matter today – if some sort of positive news comes from there, it can certainly fuel a rise in the market. We’re keeping an eye on everything, and will keep you updated of the developments related to hearing throughout the day. So keep checking back!