Markets
Bitfinex Expects News-Driven Bitcoin Gains, But Warns of Potential Selling Pressure
Bitcoins Earlier in the week, the price surged above $63,000, but analysts at Bitfinex warn that the market could be facing a pullback as the week progresses.
BTC is up 5% in the past 24 hours and 13% in the past week. These gains have come amid a confluence of factors, including the German government’s liquidation of BTC Final and optimistic feeling around former US President Donald Trump. Bitcoin’s price broke through a 125-day low around $60,200 over the weekend after hitting lows of $53,500 earlier in the week.
However, while the recovery could still extend, analysts at Bitfinex suggest that traders may have to wait for decisive moves.
Sharing their insights through this week’s edition of Bitfinex AlphaAnalysts said Bitcoin’s latest rally above the $60K level could still mirror the previous weeks. This is where a pullback occurred after a weekend mini-rally that proved short-lived around mid-week.
The news agenda drives the market, not fundamentals
The Bitcoin Fear & Greed Index has moved from fear to neutral as sentiment improves following 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 ability 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.
While the area around $60,200 is essential as a potential support level, it could also turn into a resistance zone. If bulls push higher decisively, BTC could retest recent resistance levels near the $70,000 level. A dip, however, would welcome fresh bearish pressure — especially if selling resurfaces.
Weekend relief or further sustained recovery?
According to Bitfinex analysts, weekends have provided relief for bulls in recent months. However, bears have managed to re-emerge around midweek for the past eight weeks, going back to June 8 when prices hovered around $70,000.
The “news agenda” may therefore dictate market movement in the short term. But traders may want to factor in the potential for new headwinds, with Mt. Gox lenders being one to watch.