Bitcoin is down almost 3% on Thursday but generally the cryptocurrency’s prices have been roaring.
The crypto’s slip follows yesterday’s 7.5% surge and comes on the heels of a strong run.
Bitcoin rallied for four days before Thursday and in seven of the past eight sessions.
Amid that run, it was up almost 35% coming into Thursday. The move comes as equities have largely been struggling.
Bitcoin helped give a boost to Ethereum, as well as Marathon Digital (MARA) – Get MARATHON DIGITAL HOLDINGS INC Report and Microstrategy (MSTR) – Get MicroStrategy Incorporated Class A Report, and more recently, Square (SQ) – Get Square, Inc. Class A Report.
The question now is, how far can bitcoin rally and what levels does it need to hold?
Trading Bitcoin
Daily chart of Bitcoin.
Chart courtesy of TrendSpider.com
After topping out at $52,900 in September, bitcoin was hit with a quick ABC correction down to $39,579.
It did a good job, however, holding the $41,000 area, as it hammered out a bottom and rebounded.
That rebound is the current rally we’re seeing now, which sent Bitcoin back above $50,000 and to new multimonth highs.
Now, a pullback after Wednesday’s 7.5% gain is actually pretty healthy price action.
From here, I’d love to see bitcoin hold the September high as support, at $52,900.
That gives more credibility to the monthly-up rotation that began with Wednesday’s action.
If this level is lost, Bitcoin still looks OK as long as it holds the 61.8% retracement and the $50,000 level.
Below $50,000 and the 10-day moving average is in play, along with $47,200.
On the upside, a move above this week’s high opens the door to the 78.6% retracement near $57,175. Above that could put $60,000 in play, followed by a push to the highs near $65,000.
Should bitcoin make that big of a push, it is bound to dip along the way. The key for bulls will be for the cryptocurrency to hold key levels and short-term trend measures.
If it can do this, we could see a strong fourth-quarter push.
But given the recent volatility, we also can’t rule out a deeper pullback. For now, keep an eye on $52,900, then $50,000.
