Bitfinex expects news-driven Bitcoin gains, but warns of potential selling pressure

Bitcoin started the week by rising above $63,000, but Bitfinex analysts are warning that the market could face a pullback later in the week.

BTC is up 5% in the last 24 hours and 13% in the last week. These gains were driven by a combination of factors, including the end of the German government’s BTC sell-off and the optimistic sentiment surrounding former US President Donald Trump. Bitcoin price rebounded from a 125-day low range of around $60,200 over the weekend after reaching lows of $53,500 at the beginning of the week.

However, Bitfinex analysts, who think that the rise could increase even further, say that investors may have to wait for decisive moves.

Sharing their insights via this week’s Bitfinex Alpha issue, analysts said Bitcoin’s recent recovery above the $60,000 level could mirror previous weeks, where a pullback occurred after a weekend mini-rally around midweek that proved to be short-lived.

The market is driven by the news agenda, not fundamentals

The Bitcoin Fear & Greed Index has moved from fear to neutral as sentiment improves following the recent sell-off. Supply concerns have apparently eased and the market has readjusted to new developments since Saturday.

“This shift in sentiment demonstrates the market’s capacity to rapidly integrate new information and adjust expectations accordingly, but we still believe it is important to focus on the market’s reaction in the first two trading days of the week,” the analysts wrote.

The area around $60,200 is key as a potential support level, but it could also turn into a resistance zone. If the bulls resolve decisively higher, BTC could retest recent resistance levels near $70,000. However, a drop would welcome fresh downward pressure, especially if selling resumes.

Weekend relaxation or a new and sustainable recovery?

Weekends have provided relief for bulls over the past few months, but bears have managed to re-emerge midweek for the past eight weeks, according to Bitfinex analysts, until June 8 when prices last hovered around $70,000.

So while the “news agenda” could dictate market action in the short term, investors may want to consider the potential for new hurdles for Mt. Gox creditors to watch.