Bitcoin Down but Fighting Back amidst a sense of Calm

A relative sense of normality has returned to the cryptomarkets in the 2^nd half of the week, with Bitcoin closing out Thursday with a 4.43% rise to $7,924.49.

The gains may not be as impressive as ones investors had become accustomed to, before the negative sentiment that began to hit the markets back in January, but when considering Bitcoin’s 2018 lows and the cryptobears who seized on the opportunity to write off Bitcoin and the rest, the recovery has been an impressive one.

Throughout 2017, a long debate over the likely adverse effect of regulatory oversight came to a fore this week, with the markets responding to a flurry of regulatory chatter, some accurate and some fake.

As we move through to the end of the week, a sense of calm has returned and with it an acceptance that the cryptomarket will not be allowed to continue as it had done so previously, in the hands of its developers with no interest in self-regulation.

While some of the money that walked out the door may never return, new investors may well begin to take a closer look at the market and what future it has to offer.

For Bitcoin, a 46.08% rally from Tuesday’s $5,920.72 low to Wednesday’s $8,649 high was a telling moment for the market and those doubting that the cryptomarket can survive.

A fall through to sub-$5,000 levels could have been quite damming though even then, one does wonder whether it would have spelt the end.

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For now, there is an opportunity for investors and prospective investors to reflect on the events and crypto moves of the last few weeks and begin to consider the market as one that is likely to continue to expand and grow.

The good news for investors will be the fact that we have yet to see any material correlation with other asset class, Thursday’s gains coming in spite of a global equity market sell off that has found little support, with investors waiting for more before jumping back in.

Granted, we are unlikely to see the Dow rally 46% in a couple of days, but then there are significantly greater risks involved when in investing in virtual currencies.

At the time of writing, Bitcoin was down 4.14% to $7,917.85 and, while a bearish trend has been formed through the early part of the morning, we will expect there to be plenty of support at $7,673, with Bitcoin having broken through its first resistance level earlier in the day, hitting an intraday high $8,259.42.

$10,000 levels may be considered too far off for now, but if Bitcoin can move back through $8,000 before the weekend, the prospects of hitting $9,000 before Monday’s open should set things up nicely for next week.

Investors will need to tread carefully however. Following Tuesday’s testimony to the Senate, the calls for ‘do no harm’ from the chairman of the SEC and chairman of the CFTC may fall on deaf ears. Until the U.S government’s intentions are clearer there is little impetus for a more sizable rally.

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