Bitcoin’s start to the week saw it climb above $63,000, but analysts at Bitfinex warn that the market may be facing a retrace as the week progresses.
BTC is up 5% over the past 24 hours and by 13% over the past week. These gains have come amid a confluence of factors, including German government’s BTC sell-off ending and upbeat sentiment around former U.S President Donald Trump. Bitcoin price broke above its 125-day range low around $60,200 over the weekend after reaching lows of $53,500 earlier in the week.
However, while the bounce could yet extend, analysts at Bitfinex suggest traders may have to wait for decisive moves.
Sharing their insights via this week’s issue of Bitfinex Alpha, the analysts said Bitcoin’s latest rebound above the $60k level could yet mirror previous weeks. This is where a retracement has ensued after a weekend mini-rally that proved short-lived by around mid-week.
News agenda driving market, not fundamentals
The Bitcoin Fear & Greed Index has moved from fear to neutral as sentiment improves after the recent sell-off. Supply concerns have seemingly faded, and the market has readjusted to new developments since Saturday.
“This shift in sentiment highlights the market’s capacity to quickly integrate new information and adjust expectations accordingly, however we believe it is still important to focus on the market’s reaction over the first two trading days of the week,” the analysts wrote.
Apart from the area around $60,200 being key as a potential support level, it could also flip into a resistance zone. If bulls resolve higher decisively, BTC could retest recent resistance levels near the $70k level. A dip, however, would welcome new downside pressure – particularly if selling re-emerges.
Weekend relief, or new sustained rally?
According to Bitfinex analysts, weekends have provided relief for bulls over the past couple of months. However, bears have managed to resurface around mid-week for the past eight weeks, going back to June 8, when prices last hovered around $70,000.
The “news agenda” may therefore dictate the market movement in the short term. But traders might want to factor in the potential for fresh hurdles, with Mt. Gox creditors one to watch.