Bitcoin climbed to fresh February highs above the $11,000 mark on Friday, but failed to confirm the break to the upside and continues its consolidation with a bullish bias early in the week. The technical picture has improved recently, with the price seems to have confirmed the bottom below the $6,000 level reached on February 2nd.
Despite the local rebound, the longer term prospects of the digital currency remain uncertain. The asset can’t build on the bullish momentum more aggressively due to bouts of profit taking at every attempt to stage an impressive rally. Investors’ inclination to sell rallies signals there are still doubts and much uncertainty in the cryptocurrency’s ability to return to the historical highs reached in December.
The recent fears of a tighter crypto regulation around the globe appear to have receded over the last couple of weeks, which brought some relief to investors. Interestingly, bitcoin and the cryptocurrency market on the whole hardly responded to the recent statement by Ethereum co-founder Vitalik Buterin who has warned that cryptocurrencies could fall to "near-zero" at any time. Such a behavior may signal the market has become less vulnerable to bad news and negative comments, though any echoing statements could limit bitcoin’s upside potential going further.
By Helen Rush
Senior Analyst at Capital Markets