The burning question on every cryptocurrency investor’s mind is whether Bitcoin is back? Cryptocurrencies have made a turnaround over the last two months with Bitcoin extending its rally and currently trading well above $ 8000.
After a poor start to the first half of the year we have seen Bitcoin claw its way back into the limelight over the last couple of weeks. Reaching its second highest monthly gain for the year so far, we saw Bitcoin (BTC) trading at the $8300 level as of this morning.
We have also seen some positive news flowing through on cryptocurrencies from the coveted CFA Institute adding cryptocurrencies and Blockchain to their curriculum for next year to BlackRock which is the largest asset manager in the world also considering the possibility of cryptocurrencies and Blockchain technology.
Most cryptocurrency speculators are contributing the recent gains we are seeing due to rumours that have surfaced the first ever Bitcoin exchange traded fund (ETF) is finally going to be approved. At this stage these are just rumours but the market seems to be reacting positively to the possibility of a Bitcoin ETF but there are still regulatory hurdles ahead before approval of such instruments.
Looking at the chart of Bitcoin (BTC)
Looking at the chart we can see the price move lower on Bitcoin to the June lows forming a classic inverse head and shoulders (IHS) technical pattern signalling a price reversal. The price action of Bitcoin has broken through the resistance level of $ 6819 (Neckline) and is pushing higher. The price is also trading above the 50-day simple moving average (SMA) which is supporting the move higher.
Source: Bloomberg
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