BTC began the day with a steady upward movement of $ 40 from its $ 9,200 starting point, signalling very little intention other than to stick within a tight range.
It followed a week of convulsive activity which began with a new high for 2020 as bitcoin briefly nudged $ 9,600 before stalling and hitting a downward curve to what looked like a possible line of resistance around $ 9,100.
Volatility is certainly on the cards, and had been suggested by several analysts raising eyebrows at low market volume and the seemingly tight bandwidth most trades were taking place within.
Some observers were also warning that BTC’s push on $ 9,600 was largely being driven by China’s looming economic troubles in light of the coronavirus outbreak. Monday’s opening of stock markets in Shanghai saw concerned traders piling investments into bitcoin as they feared for the value of home stocks.
However, a sudden move towards double figures had not been anticipated – especially from a starting point barely holding its nose above the $ 9,200 waterline.
On the face of it, such a sharp jump to the upside would very quickly drag along opportunistic day traders keen on ending Wednesday with a tidy little earner. It will also attract those hit with the popular crypto term FOMO – fear of missing out – as investors clamour to buy-in before bitcoin’s rocket prepares for a moon launch.
It is this kind of activity – particularly when it begins some eight hundred dollars shy of such a teasing point of seduction like $ 10k – that generates suspicion and caution.
It may well be that this morning’s apparent readiness for another huge drive could actually be a spoof wall – or a ‘fakeout’ as the terminology goes. This is something which often occurs when the dark market forces behind the bulls and bears are keen to inject their own volatility into the charts. After all, that’s where the fast money is made.
There is, though, some degree of hard evidence that might suggest BTC’s current mood – spoiling for a fight with $ 10,000 – could indeed be genuine. Worldwide, the market cap of cryptocurrencies currently stands at $ 250 billion, with bitcoin alone accounting for almost two-thirds of this figure. It’s worth noting that on each occasion the market cap hovers around this level, there follows a significant bounce.
Bitcoin’s army of short traders have, no doubt, enjoyed plenty of wins as they gamble on the vigorous ups and downs currently haunting the charts, but if the movement and volume returns to drive the price above $ 10k, it will be the patient long traders and BTC holders who will reap the rewards.