After making a solid recovery from the low Bitcoin reached of $5,100 on Wednesday, October 18th, it is once again coming back and looking like there is nothing to stop it.
At the time this article was written, the exchange rate between BTC and the U.S. Dollar is about $5,700. This means that it has shot up about 75 in the past 24 hours and week-on-week is up by around 5%. On a month-to-month basis, the coin is up by almost 50%.
The drop to a price of $5,100 showed that there was a healthy correction in the price given the current overbought conditions. With the ‘V’ shaped recovery pattern, everything seems to be going to projections. If there is yet another hard fork during the month of November, it could suggest another price increase as more buyers come into the space.
In the case of the short-term, the conditions seem to be overbought which is not great for the price. The conditions and the price action shows that investors should be cautiously bullish when buying bitcoin. One of the patterns recognized in the charts is the ‘Dragonfly Doji’ that shows a long lower shadow as well as no real body or upper shadow. It indicates that demand is going lower and that there may be indecision among investors.
If the price action continues to act in the same way, it may rise in price by a solid amount. The psychological barrier of $6,000 is what most investors are hoping for as it would not appear to drop lower once reaching that amount. Any negative price action however would indicate a bearish reversal in the trend. This would likely bring the price of bitcoin below $5,000, which would not be great for the coin.