Bitcoin Price Looks North As Trading Volumes Hit 9-Month Highs

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  • Bitcoin witnessed an inverse head-and-shoulders breakout on Monday and rose to $Four,00zero yesterday, confirming a bullish reversal on the day by day chart.
  • The pattern change is backed by a leap in buying and selling volumes to ranges final seen in Might 2018. The rally, subsequently, appears to be like to have legs and December highs above $Four,200 might come into play, albeit after a minor bout of consolidation or pullback, as the indications on the Four-hour chart and day by day charts are reporting overbought circumstances.
  • A break beneath Monday’s low of $Three,614 would invalidate the bullish setup, though that appears unlikely, as longer length charts are starting to align in favor of the bulls.

Bitcoin (BTC) might revisit December highs above $Four,200 within the near-term because the latest rally is backed by a surge in buying and selling volumes.

The main cryptocurrency by market worth is at present buying and selling at $Three,930 on Bitstamp, having clocked a 5.5-week excessive of $Four,00zero yesterday.

The 20 % appreciation witnessed during the last 12 days is accompanied by a 28.Four % rise in day by day buying and selling volumes, in accordance with CoinMarketCap.

Notably, whole buying and selling volumes throughout all exchanges jumped 40 % to $9.91 billion on Monday, validating BTC’s bullish breakout above $Three,800. Additional, investor curiosity within the cryptocurrency has elevated post-breakout, with volumes rising additional to $9.93 billion yesterday – the best stage since Might Three, 2018.

So, the latest rally seems to have substance and costs might rise in the direction of $Four,236 (Dec. 24 excessive) within the near-term.

Day by day chart

Each the inverse head-and-shoulders breakout and the triangle breakout seen within the above chart point out a bearish-to-bullish pattern change.

The 5- and 10-day shifting averages (MAs) are trending north, indicating a short-term bullish setup. The 50-day MA has bottomed out (shed bearish bias) and the 100-day MA hurdle has been scaled.

Whereas the trail of least resistance is to the upper aspect, an increase towards the Dec. 24 excessive of $Four,236 might not occur instantly. The 14-day relative energy index (RSI) has moved into overbought territory above 70.00, whereas the lengthy higher shadow connected to the day gone by’s candle is sending an identical message.

Four-hour chart

On the Four-hour chart, the RSI is reporting overbought circumstances and has diverged in favor of the bears (doesn’t mirror the upper value highs) Nevertheless, the stacking order of the 50-candle MA, above the 100-candle MA, above the 200-candle MA is a traditional bullish indicator.

So, pullbacks, if any, may very well be short-lived – particularly because the longer length charts are wanting more and more bullish.

Three-day chart

BTC’s present Three-day candle appears to be like set to shut effectively above $Three,711. That may add credence to the bullish exterior reversal candle created in three-days to Feb. eight and produce potential for a transfer in the direction of $Four,429 (38.2 % Fibonacci retracement of the sell-off from November highs to December lows).

Supporting that situation are a bullish crossover between the 5- and 10-day MAs, confirmed earlier this month, and an RSI of 51.00.

Disclosure: The creator holds no cryptocurrency belongings on the time of writing.

Bitcoin picture by way of Shutterstock; charts by Trading View

About Tom Greenly

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