The latest bouts of volatility are not unusual for bitcoin and cryptocurrency markets in general
Bitcoin price has steadied around the $50,000 psychological level on Thursday following the recent sell-off that took the coin from fresh all-time highs around $58,300 to $44,800 earlier this week. In the process, the BTCUSD pair regained the 20-DMA but is yet to confirm the breakout on a daily closing basis.
The latest bouts of volatility are not unusual for bitcoin and cryptocurrency markets in general. Of note, a recovery above $50,000 was triggered by the news that Square had purchased $170 million worth of BTC. The fintech company had bought 3,318 bitcoins at an average price of around $51,235. So, bitcoin now represents about 5% of its total assets. As a reminder, the firm bought $50 million worth of the digital currency last year.
Furthermore, MicroStrategy announced yesterday that it’s bought another $1 billion worth of bitcoin. The company’s shares rose by more than 400% since last August when it disclosed its first bitcoin purchase.
As for the recent selling pressure surrounding the coin, it was in part due to negative comments from U.S. Treasury Secretary Janet Yellen. She called bitcoin an extremely inefficient means of payment and warned about its use in a number of illegal activities because its use is difficult to trace.
From the technical point of view, the fact that BTCUSD managed to stage a bounce and regained the mentioned moving average (today at $48,900) as well as the $50,000 threshold, could be a sign of further improvement in the technical picture following the slump.
On the other hand, the upside momentum looks too modest for the time being to bet on stronger gains in the short term. Bitcoin will probably need an extra boost on order to climb back to its recent tops and target the $60,000 barrier. Meanwhile, the longer-term outlook for the digital currency remains upbeat amid the ongoing institutional acceptance.
