After a three-day retreat, BTCUSD staged a rebound over the weekend and attempted to regain the $7,000 threshold on Monday but the sellers reemerged recently and sent the price into the negative territory again. Bitcoin is now down 1.75% on the day.
Over the weekend, the digital currency broke several upside barriers as the sentiment in the industry has improved markedly. The reason for bulls awakening was the report that George Soros’s hedge fund is planning to trade cryptocurrencies. The news was especially impressive for the market as the famous billionaire called cryptocurrencies a bubble in January. In another sign of growing acceptance of bitcoin, Venrock, a venture capital firm that is backed by Rockefellers, is planning to start investing in virtual currencies to diversify its portfolio.
These are good signals for the long-term future of the industry as more and more day traders leave the market, opening the way for large and institutional investors. This should provide the market with a healthier ground and to reduce its volatility which remains relatively high amid its speculative nature.
As for the technicals, the current bearish move could be limited by the $6,400 support. In this case, the pair will maintain the opportunity to regain the $7,000 mark. But on the whole, bitcoin is still vulnerable, and recovery attempts will likely remain shallow for the time being.
By Helen Rush
Senior Analyst at Capital Markets