Bitcoin (BTC) is back this week as a rebound takes the largest cryptocurrency ever closer to new all-time highs — what’s in store?
Cointelegraph takes a look what could move Bitcoin markets in the coming days as buyers emerge and $16,000 gets left behind — at least for now.
Bitcoin cancels Black Friday discounts
The main story among Bitcoiners on Monday is its performance over the weekend.
After plumbing depths of $16,300 last week and failing to get much higher than $17,000 in the days following, Bitcoin surprised on Saturday, beginning a climb that has reached $18,600 on Nov. 30.
The timing led to comparisons to Black Friday, as BTC/USD fell in time for the infamous discount day and rose back up afterward.
“Guess the Black Friday bitcoin sale is officially over. Hope you stocked up,” Barry Silbert, CEO of asset management giant Grayscale summarized.
At press-time levels of $18,550, Bitcoin is now up almost 14% versus the lows, recouping the majority of its losses from when it fell from $19,500. This will be a familiar sight for traders, who will now be eyeing the potential for Bitcoin to avoid the psychological selling pressure which so clearly set in near the all-time highs of $20,000.
“Crucial level to hold is the $17,700-17,850 breaker. If that is lost, I think we’ll see the 16’s again,” Cointelegraph Markets analyst Michaël van de Poppe said in his latest analysis on Sunday.
Van de Poppe likewise highlighted the area around $18,500 and $18,700 as the crucial breakout point to fuel further bullishness. Bitcoin subsequently hit the midpoint of that range, but has so far failed to turn it into a launchpad for reclaiming any higher levels.
Nonetheless, should current levels hold, Bitcoin will easily see its highest ever monthly close at the end of Monday.
$1,300 Bitcoin futures gap opens lower
One major argument for Bitcoin reversing downwards for its next move comes in the form of a classic “gap” setup on futures markets.
Thanks to the weekend’s volatility, Monday has begun with a noticeable “gap” on the charts at CME Bitcoin Futures, this one lying $1,500 lower than the current spot price.
Gaps refer to the empty space left between the end of Friday trading and the start of Monday trading for futures, and the latest one to open is $1,300 in size — one of the largest ever.
Historically, Bitcoin has opted to rise or fall to “fill” such gaps once they appear, and this has tended to occur quickly, meaning that the chance is there for a fresh dip to as low as $16,990 — the beginning of the gap.
A further albeit much smaller gap remains “unfilled” from previous trading at around $19,000.
“It all depends on how harshly we reject in this range and how we are going to react around the support at $17,000, which is also the weekly close on the CME futures,” Van de Poppe commented.
He also noted that one weekend’s upside is no good as a starting point for being bullish. Entering Bitcoin is a wise move only when support is reached on higher timeframe support levels, meaning that the CME gap should be resolved by the time that the real state of the market becomes more obvious.
An accompanying survey meanwhile showed a fairly even split between 6,000 respondents regarding whether BTC/USD would hit $14,000 or $22,000 first.
Stocks drop after record month
Outside Bitcoin, the macro picture is mixed as the month ends. November saw 13% for equities worldwide, a record month as expectations of a Coronavirus vaccine ran high.
On Monday, however, progress began to retreat, with China leading a turnaround from gains to losses and European futures following suit.
The U.S. dollar, already under pressure, is expected to dip to its lowest levels since April 2018, Bloomberg reported on the day. As noted by Cointelegraph, the U.S. dollar currency index (DXY) has been steadily falling over the past weeks, erasing some previous gains.
Bitcoin typically reacts favorably to DXY weakness, and while its relationship to macro assets more broadly is waning, abrupt movements in the index remain apt to dictate short-term market direction.
At press time, DXY stood at 91.72, having broken the 92 support level, which was preserved even in August when Bitcoin hit $12,000 for the first time this year.
Virus-induced headaches meanwhile continue across the Western world. The United Kingdom’s economy, according to estimates from Bloomberg shared by market commentator Holger Zschaepitz, will contract by the most in over 300 years.
Market-specific issues, such as Tesla debuting on the S&P 500, are also on the radar.