Bitcoin is building on Friday's sharp recovery from lows below $5,800, indicating the corrective rally has more substance than what many presumed to be another "dead cat bounce."
Overall, the premier cryptocurrency jumped to $6,661.76 at 13:00 UTC, a 6.37 percent increase from the day's low of $6,262.28, and was last seen trading at $6,613, according to the CoinDesk Bitcoin Price Index (BPI).
The broader market followed suit, as it usually does when bitcoin (BTC) flexes its muscles. Currently, the total value of all cryptocurrencies stands at $270 billion, having jumped $14 billion in the in the morning hours, according to CoinMarketCap.
Looking ahead, the broader market may remain solidly bid as the world's largest cryptocurrency by market capitalization looks set to test the $7,000 mark, courtesy of a bullish continuation price pattern, as seen in the charts below.
Having faced rejection at flag resistance in Asian hours, the cryptocurrency was expected to revisit flag support. However, BTC unexpectedly picked up a bid at $6,275, setting stage for a big move on the higher side.
The subsequent bull flag breakout, as seen in the chart above, signaled a resumption of the rally from Friday's low below $5,800, temporarily silencing the "dead cat" critics. Price action now sets scope to $7,065 (target as per the measured height method, i.e. pole height added to breakout price).
What's more, the bullish breakout is accompanied by a rise in volume. So, the gains look sustainable.
BTC cleared the falling wedge resistance on Friday, signaling a short-term bear-to-bull trend change.
Further, a bullish follow-through to Sunday's inside bar, as seen today, only validates Friday's falling wedge breakout and indicates better times ahead for BTC.
- The high volume bull flag breakout seen in the hourly chart has likely put bitcoin on the path to $7,000, proving Friday's rally to be the beginning of something more substantial than initially thought.
- Acceptance below $6,275 (weekly low) would abort the short-term bullish view.
Bitcoin price image via Shutterstock