Bitcoin managed to snap out of its red streak in early 2017, after it had posted 11 consecutive red weekly closes. The market recovered and bitcoin began to see some positive weekly closes. The market correction caused bitcoin to lose approximately $4,000 and its top value. The previous week’s close was a red close, which made it appear that a recovery could be possible.
Two red closes
In the past few weeks bitcoin has seen incredible moves that have restored faith in its market. Bitcoin had reached $25,200 at one point before it was beaten down by bears. The cryptocurrency is still in a bullish trend, but at a lower price.
The digital asset recorded its second consecutive close of red due to the reverse-tracement from $25,200. While two red weekly closes is not cause to panic for highly volatile digital assets like bitcoin, the previous precedents have been set. This is evident in the April beginning when it had experienced two consecutive red weekly closes. The asset would see 9 more red closes over the next week, making it the longest-running bitcoin transaction.
However, if you look at the trends that have occurred in digital assets, they had never spent much time there. This is evident in the June market decline to $17600. Although it was only the second consecutive weekly red close, the market reversed quickly.
Is There a Bitcoin Rebound in the Works?
Rising inflation is one of the greatest threats to wealth. A rising inflation rate can impact the currency’s buying power. Inflation rates have risen to their highest level in 40 years, according to the Fed’s last three reports. Investor panic was triggered by this, as expected.
Investors are shifting to crypto currencies like bitcoin due to rising inflation. Because the inflation rate is always lower than the digital asset, this trend has continued for many years. In an inflation rate of 9% bitcoin has had yearly returns in excess of 200%. Given this, it is expected more investors will move funds into the “digital gold.”
Santiment, an on-chain analytics company has revealed it also expects that the digital asset will recover within the next week. The reason is that the short position on an exchange has increased in the wake of the price drop. Many people bet against the market and it creates an opportunity for investors. Accumulation trends are often more successful than sharp recoveries.
Bitcoin’s price is still holding up nicely. Although the price of this digital asset was previously below $21,000 Sunday, it has since recovered to trade above $21,200. Bitcoin has also shown significant support in the 4 hour chart before the opening of trades. It will be a rebound point for cryptocurrency if it holds support at $21,200.
Featured image taken from GoBanking rates, chart by TradingView.com
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