What’s up with Bitcoin?
That seems to be question on the minds of most observers of the biggest digital token after it suddenly climbed as much as 12 percent Tuesday in less than an hour. The surge accelerated as the cryptocurrency pushed past the $7,000 price level for the first time in more than a month.
“No specific catalyst triggered this rally,” Lucas Nuzzi, director of technology research at Digital Asset Research, said in an email. “Some traders have claimed that BTC is forming an H&S bottom, and volume has spiked.”
Bitcoin last traded above $7,000 on June 8, before getting caught in a sector wide sell-off that wiped out about $42 billion over the following weekend. Some observers pinned that retreat on an exchange hack in South Korea, while others pointed to lingering concern over a clampdown on trading platforms in China. Cryptocurrency venues have come under growing scrutiny around the world in recent months amid a range of issues including thefts, market manipulation and money laundering.
Advocates of the virtual currency did receive some good news this week, such as word that the CFA Institute, whose grueling three-level program has helped train more than 150,000 financial professionals, is adding topics on cryptocurrencies and blockchain to its curriculum for the first time next year.
A key technical gauge, the Directional Movement Index just crossed into its first positive divergence since April. The last time it flashed this signal Bitcoin rallied about 20 percent over the next three weeks, which may signal the rally has just begun for Bitcoin.
But the Bitcoin bulls may want to exercise a bit of caution. Some cited a report Sunday that BlackRock Inc. formed a team to investigate ways of taking advantage of cryptocurrencies and blockchain, the computer code that underpins them. Larry Fink, chief executive officer of the world’s largest asset manager, threw some cold water on that speculation.
“I don’t believe any client has sought out crypto exposure,” Fink said in an interview on Bloomberg Television Monday. “I’ve not heard from one client who says, ‘I need to be in this.’”
Source: Bloomberg
