Bitcoin is down almost 3% on Thursday but generally the cryptocurrency’s prices have been roaring.
The crypto’s slip follows yesterday’s 7.5% surge and comes on the heels of a strong run.
Bitcoin rallied for four days before Thursday and in seven of the past eight sessions.
Amid that run, it was up almost 35% coming into Thursday. The move comes as equities have largely been struggling.
Bitcoin helped give a boost to Ethereum, as well as Marathon Digital (MARA) – Get MARATHON DIGITAL HOLDINGS INC Report and Microstrategy (MSTR) – Get MicroStrategy Incorporated Class A Report, and more recently, Square (SQ) – Get Square, Inc. Class A Report.
The question now is, how far can bitcoin rally and what levels does it need to hold?
After topping out at $52,900 in September, bitcoin was hit with a quick ABC correction down to $39,579.
It did a good job, however, holding the $41,000 area, as it hammered out a bottom and rebounded.
That rebound is the current rally we’re seeing now, which sent Bitcoin back above $50,000 and to new multimonth highs.
Now, a pullback after Wednesday’s 7.5% gain is actually pretty healthy price action.
From here, I’d love to see bitcoin hold the September high as support, at $52,900.
That gives more credibility to the monthly-up rotation that began with Wednesday’s action.
If this level is lost, Bitcoin still looks OK as long as it holds the 61.8% retracement and the $50,000 level.
Below $50,000 and the 10-day moving average is in play, along with $47,200.
On the upside, a move above this week’s high opens the door to the 78.6% retracement near $57,175. Above that could put $60,000 in play, followed by a push to the highs near $65,000.
Should bitcoin make that big of a push, it is bound to dip along the way. The key for bulls will be for the cryptocurrency to hold key levels and short-term trend measures.
If it can do this, we could see a strong fourth-quarter push.
But given the recent volatility, we also can’t rule out a deeper pullback. For now, keep an eye on $52,900, then $50,000.