After a Slight Pullback, Bitcoin Shows Signs of Strength

After a Slight Pullback, Bitcoin Shows Signs of Strength

Bitcoin traders hoping to see their favorite cryptocurrency reach $5,600 in April were mildly disappointed as the final weekend of the month approached. Since the first day of April, the BTC/USD pair has been very active in terms of trading volume, and a rally sentiment took hold for most of the month, pushing the exchange price as high as $5,554 on April 23. The $5,600 level seemed to be on the horizon, but a sudden pullback down to $5,200 materialized in just a couple of days.

In just a few hours following the Bitcoin pullback, traders on Bitfinex went on a buying spree that pushed the token above $5,400. While the trading volume initially suggested that day traders were swooping in to make quick profits, relative strength started to build at the level, thus prompting some technical analysts to believe a more severe pullback towards $5,200 would be unlikely.

Analyzing Cryptocurrency Market Trends

Since April 15, bearish pressure has been building around various cryptocurrencies, but not so much on Bitcoin, at least not until now. The current sentiment is not completely negative, but it is not positive enough to sustain the rally that so many traders are hoping for in 2019. Whenever this happens, investors start looking for fundamental signs that things will turn around, but such signs are mostly absent at this time. Something that would certainly boost BTC and the overall digital currency markets would be the approval of a cryptocurrency exchange-traded fund, but this is something that may not happen until October. The United States Securities and Exchange Commission has evaluated a few ETF applications; the filing that has taken the lead is the VanEck SolidX Bitcoin Trust, but even this application is still far from an approval. 

Technical analysis in late April does not discard the possibility of BTC/USD touching the $6,000 mark, but there are concerns that the market may find stability between the $5,200 and $5,400 for a couple of weeks. The current volatility is nothing like it was from 2015 to 2018, but seasoned investors should not be surprised by sudden moves. Beginners should keep in mind that the cryptocurrency market is still ruled by sentiment and technical indicators, thus making it susceptible to volatility.