Bitcoins surprise bounce


While all attention was elsewhere, Bitcoin (BTCUSD) delivered a bit of a surprise on Monday morning, with a strong opening at $6345, well above Friday’s close of $5875. This breaks out of the multi-week downward channel and it will be interesting to see if pressure can build for a test of the key $6900 level. A failure to hold above the channel now would be catastrophic for the cryptocurrency, and indicate a loss of confidence in the asset that may take a very long time to recover. However, as is often the case with channel breakouts, this is more likely to presage a period of range-bound consolidation than the super-rally that the HODL evangelists are hoping for. Both Bulls and Bears have every reason to be nervous at this point, but we remain broadly of the view that dips that do not result in a sustained breach of $5875 are buying opportunities.

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