The day’s trading session was followed by notable volatility with bitcoin price falling to a low of 7,950 levels. However, the breach below USD 8,000 did not last long as prices recovered briefly. In the more recent hours, markets keep trading around USD 8,200 levels following a recovery.

The Day’s Signals

  1. A major selloff caused prices to go from USD 8,200 levels to hovering above USD 8,000.
  2. The followup to the downward spike included yet another selloff that this time caused a breach below 8,000.
  3. Interestingly enough, the breach appears to have kickstarted a wave of buying pressure. Such trend is not yet showing any signs of longevity though.

bitcoin gdax-btcusd-May-19-2018-6-21-20

GDAX BTC/USD charts are indicating that support for USD 8,000 might be underlying. The fact that a breach was observed today wouldn’t normally bring confidence, but the market’s reaction begs otherwise. Traders shouldn’t be too quick to judge of course, as the day’s trading volumes have gone down in comparison to the last few days. Big orders causing price spikes appear to be a driving force in today’s trading session. The market’s response to the spike that pushed prices to a breach certainly does showcase some support though. The market taking consideration on the recovered USD 8,200 brings on a more positive outlook in the following of a breach.

bitcoin okcoin-btcusd-biweekly-futures-May-19-2018-6-27-23

OKEX BTC/USD weekly futures showcase a tendency of futures traders to exaggerate selling pressure to an extent, which becomes more apparent at the time of the day when greater selling pressure was observed. Futures markets did, however, break out of this sentiment with prices moving up again. The difference in futures prices and markets rates grew to a bigger difference with futures maintaining higher prices.

In summary, today’s response to the sizable downward spike that was experienced was notably positive. It’s worth pointing out that markets appear to be on an overall downtrend over the span of this week. With that in mind, support for a recovery after a breach might showcase that underlying support could be holding up for USD 8,000 levels. Of course, a day with decreased volumes would not set a sentiment of support in stone. For that reason, the sustainability of the recovery remains to be seen.

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