Bitcoin trades above the 7,000 area as good news fuels cryptos

Bitcoin is trading above the 7,000 area after breaking above several significant resistances. Market experts welcomed good news concerning the cryptocurrencies sphere and a risk on environment that all worked out.

Bulls are optimistic this week as the CFTC reported in its Commitment of Traders that bitcoin shorts positions were declining in the latest weeks. Also, Morgan Creek Capital Management published they are creating a new digital asset index fund made from a market-cap-weighted basket of the top 10 largest cryptocurrencies, ex Ripple and Stellar.

Finally, Quartz news announced the launching of a new cryptocurrency newsletter.

Bitcoin is currently trading in consolidation mode around 7,070 as the pair rallied for two days from 6,650 to trade as high as 7,130 on Tuesday. In its two-day journey, BTC/USD broke the 6,840 resistance, the 50-day moving average line at 6,950 and it is heading to the significant 7,240 level.

BTC/USD daily chart August 28

BTC/USD daily chart August 28

Technical conditions are still bearish but improving. Indicators are even just about to turn positive in the case of the MACD that is now crossing its midlines. RSI is showing that the uptrend is healthy and moving averages are shifting to neutral from negative.

To the upside, if the pair consolidates levels above the 7,000 area, it will find immediate resistance at 7,240 and 7,790. Above there, check for the 200-day moving average at 7,885.

Tomas Salles, FXStreet analysts, remember that the bullish move is still too young to take it for granted, and “more important today are the support levels, as a close below the key price level of $6,850 would undo all what the BTC/USD has achieved, returning it to the previous scenario. This is the first and most important support, but the following should be taken into account in case of discouraged sales. Next support level in the price level of $6,760 (price congestion), $6,638 (SMA100), $6,560 (price congestion) and $6,477 (EMA50).”

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