The world’s biggest cryptocurrency has been down more than half so far this year but recent measurements, including a key volatility indicator, suggest the digital asset may be in for a swing in either a bullish or bearish direction.
At the time of writing, the commodity is worth £5,000 – up slightly from the same time yesterday.
An incremental price increase of 3.63 percent over the last seven trading days could signal there is still a bright future for the digital asset.
A leading technical indicator, a combination of the relative strength index (RSI) and momentum studies, shows the momentum gauge has crossed the RSI gauge, Bloomberg reports.
The shift, determined by an analysis of RIG trend lines, could indicate a positive price upswing is imminent.
Bitcoin’s price rose the last time the gauges crossed, in a potential sign of things to come.
It is the fourth time the momentum gauge has crossed the RSI gauge in 2018 – on each occasion, Bitcoin’s price rose.
In mid-August when the gauges crossed, the cryptocurrency’s price rose by 21 percent over the next three weeks.
But the asset has seen a general decline in value in recent months, with a more than 50 percent slump in 2018.
Cryptocurrencies are highly volatile and are susceptible to sudden changes in value.
The decline could be in part due to a regulatory crackdown and a rejection of Bitcoin and other cryptocurrencies by the Securities and Exchange Commission (SEC) earlier this year.
Last month the SEC dismissed requests to list nine cryptocurrency funds, citing concerns about manipulation.
The SEC’s director of corporate finance, William Hinman, said in June that Ethereum – the world’s second-most-popular cryptocurrency – should not be regulated in the same way as stocks and bonds.
Mr Hinman’s comments echoed an earlier statement by SEC chair Jay Clayton, who said he did not consider Bitcoin a security and it was therefore unworthy of regulation.
Mr Clayton said: “A pure medium of exchange, the one that’s most often cited, is Bitcoin.
“As a replacement for currency, that has been determined by most people to not be a security.”
The financial expert added: “To the extent something is a security, we should regulate it as a security, and our securities regulations are disclosure-based, and people should follow those and provide the information that we require.”
Mr Clayton’s remarks are the clearest indication to date the SEC does not view Bitcoin as a security.
The digital asset’s commodity status, therefore, hangs in the balance.