Bitcoin price analysis: BTC/USD settled well above $6,500, "Not so fast!" experts say

Cryptocurrency market continues recovering from recent lows.
Morgan Stanley helped improve the sentiments and push the prices higher.
Jani Ziedins of CrackedMarket warns that the upside will be short-lived.

Cryptocurrency market staged a nice recovery on Thursday with Bitcoin gaining over 3% from Wednesday's levels. Currently, the digital coin No.1 is changing hands at $6,540 with a clear upside bias.

Morgan Stanley played into bull's hand

The market was already creeping higher when Morgan Stanley broke the news: the financial giant revealed that it was working on a solution that will allow investors to get “synthetic exposure to the performance of bitcoin.” This news was welcomed by the market and propelled prices even higher.

Morgan Stanley is not the only traditional bank with plans to tap cryptocurrency market. Recently, Citigroup and BlackRock revealed the plans to launch digital-asset related products, while Goldman confirmed its intent to create a trading desk for cryptocurrency instruments.

Not so fast

However, some experts do not buy into it, saying that the upside momentum will be short-lived and won't take us much higher.

“Bitcoin keeps slipping and is barely holding $6k support. Last week’s rebound to $7.4k is dead and gave us another lower-high since we failed to match the previous $8.4k bounce. Lower-highs tells us the next lower-low is just around the corner,” Jani Ziedins of CrackedMarket commented in his blog post.

The expert points out the shallow recoveries signal imminent breach of critical support levels.

“The trend is most definitely lower, but each bounce is still a selling opportunity. The worst is still ahead of us,” Ziedins added.

Bitcoin's technical picture

BTC/USD is knocking at $6,530 (23.6% Fibo retracement weekly that stopped the recovery on September 7). Once this resistance is cleared, the upside movement will gain traction and push the price towards $6,600. The ultimate short-term targets are $6,800 (23,6% Fibo retracement) and $7,000.

On the downside, BTC is supported by $6,500. Once below, the sell-off may be extended to $6,330 (SMA50 and SMA200, 1-hour chart), while the critical support is created by the upside trendline currently at $6,230.

BTC/USD, 1-hour chart

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