BITCOIN MARCHES TOWARDS $8,000
Bitcoin extended the gains started a week ago and is currently trading at $7700. This is the highest level since May 23. It is also an extension to the 20% gains the cryptocurrency had a week ago. The current rally is mostly because of the expected demand when large institutions and asset management companies start investing in the digital currencies.
Just last week, Blackrock announced that it would set up a working group to explore investing in Bitcoin and other blockchain products. A report by Grayscale – which manages more than $2 billion – said that more institutional managers are moving to investing in cryptocurrencies. Traders believe that these deep-pocketed investors will bring more demand to cryptocurrencies, which will push the price higher.
Still, Bitcoin is a shadow of its former self. Last year, it was among the best-performing assets, gaining by more than 1000%. This year, it has lost more than 60% of the value as traders started worrying about regulations and the security of their Bitcoins. Further, the demand expected by the traders after Bitcoin futures came online has not materialized.
The BTC/USD pair is trading at $7,700, which is above the 50 and 100-day Exponential Moving Average (EMA). This price is an important resistance level as shown in the chart below. It is also at the 50% Fibonacci Retracement level. Further upward moves above this level will likely see the price test the important level of $8,000.