Bitcoin, the largest cryptocurrency by market capitalization, traded slightly lower Monday, residing just under $6,500. That is not far removed from the $6,800 area, which some crypto market observers believe is the necessary price for bitcoin to conquer to prompt traders to get bullish on the digital currency.
Momentum plays an important role in when to buy bitcoin, but what may be surprising is that buying the cryptocurrency after it has experienced big rallies can be a winning strategy. Some crypto market observers believe the long-term outlook remains encouraging for the largest digital currency.
“Stepping back, the leading cryptocurrency clocked a four-week high of $6,810 on Coinbase last Monday before ending the week (Sunday’s UTC close) at $6,415. Despite the pullback from the multi-week highs, BTC ended up 3.7 percent higher on the week,” reports CoinDesk.
Encouraging Signs for Bitcoin
Bitcoin’s all-time high of around $20,000 was seen in December 2017 and the digital currency has not even been close to flirting with those levels this year. Some market observers believe a return to $10,000 anytime soon will be challenging. Still, there are some important technical levels for bitcoin traders to acknowledge over the near- to medium-term.
Last week’s price action in bitcoin could be a signal that it has some near-term upside ahead of it.
“The bull move last week saw the creation of what’s called an inverted hammer candle. This is characterized by a long upper ‘shadow’ (the difference between the weekly high of $6,810 and the weekly close of $6,415) and a small ‘body’ (the spread between the weekly opening price of $6,183 and the closing price of $6,415),” according to CoinDesk.