Bitcoin set to test $7,000 in Christmas hangover

Festive trading sees volume return to the market, but will the price recover, fall or even itself out as opposing forces battle it out in the final days of 2019?

Bitcoin failed to deliver the Christmas cheer many were expecting as a strong push back from $7,400 saw the world’s most dominant cryptocurrency looking dangerously like spending the remainder of the festive period battling to stay above $7,000.

Things had appeared decidedly buoyant on Christmas Eve as $7,600 looked like it was going to be the springboard that would propel BTC above $8,000 in time for its 11th birthday.

However, the ghost of Christmas past saw history repeating itself as trading volume suddenly rose late on Christmas Eve driving downward movement and quickly knocking £300 off the price.

Within 24 hours, Bitcoin was unsteady on its feet and the defence of $7,200 began.

As most people were sleeping off Christmas Day dinner, BTC was trying to shake off its own hangover as it picked up from a Yuletide low of $7,125 to propel towards a slightly healthier-looking $7,325.

The Boxing Day sales spirit looked to be offering further recovery, as the previous day’s leftovers helped the price shift up a gear to $7,350. But, like a cheap Christmas toy, it didn’t last long.

Bitcoin began this morning below $7,200, and even briefly crashed under $7,100 before retracing quickly up to $7.2k – a line that looks likely to be revisited time and time again as the market fights hard for ground above $7,000.

Put an ear to the trading communities and you’ll hear equal echoes of “bear trap” and “bull trap” as those looking for some seasonal shorts place their bets. One thing this does betray though, is a definite lift in trading volume – a key indicator that there’s plenty of life in the market, even in the holiday period.

Fool’s errand

That boost of activity will often suggest a lift in price but, as always with BTC, predicting the future is a fool’s errand.

That said, a deep look at the market over the last 12 hours or so tells us there’s clearly some buying volume offering enough enthusiasm to take BTC back above the realms of $7.5k, but there’s also enough push-back to stamp those endeavours down below $7,000, should the momentum be present.

In fact, a quick straw poll of online experts and troll boxes would suggest most of the smart money is on a price drop – and the portents are certainly giving a nod of approval to that possibility.

Of course, there’s also a likelihood that the two forces could mirror one another’s efforts and simply spend the remainder of 2019 in a fruitless tug-of-war over $7,200.

Either way, it’s fair to say Bitcoin will end the year the way it began – jittery and twitching with no real clue of where it’s going.

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