Following a brief spike to the $8,450 area earlier this week, bitcoin was rejected from mid-November highs and started to show signs of a bearish correction. But on the way down, the largest cryptocurrency by market capitalization has encountered a local support around $7,600 and turned positive on the day. The latest move suggests BTCUSD could make another bullish attempt in the near term and probably even challenge the above mentioned highs if the token manages to preserve the impetus. When correcting higher, bitcoin has overcome the 100-daily moving average but has yet to confirm a breakout on a daily closing basis.
The recent rally in bitcoin came in tandem with safe-haven gold demand amid a strong wave of risk aversion due to an unexpected escalation in the geopolitical tensions between the United States and Iran. Later, concerns started to ease after Donald Trump made it clear that he was not going to spark a full blown war in the Middle East. As a result, risk sentiment has improved, and the main cryptocurrency had to retreat from local tops. Such behavior by BTC suggests investors asses the token as a safe-haven asset along with gold, the Japanese yen and the Swiss franc. It means that bitcoin demand will likely further pick up in times of heightened volatility in the traditional markets and geopolitical or economic instability. In this context, the cryptocurrency will likely become more predictable in the future, as risk sentiment may serve as an indicator of dynamics in bitcoin.
From the technical point of view, the BTCUSD pair may target the $8,500 region if the prices manage to hold above the 100-daily moving average in the near term and validate it as a support area. Otherwise, some profit taking could follow again. Anyway, the pair will likely remain positive in the weekly timeframes. Meanwhile, in the hourly charts, the picture looks clearly bullish, with bitcoin is now challenging the $8,000 psychological level. Once firmly above this area, traders will shift back to the key $8,500 resistance zone.