Bitcoin Eyes $18,000 as Tide Turns in Bulls' Favor
Bitcoin is strongly bid today amid reports of institutional buying, and has climbed 10 percent in the last 24 hours.
Bitcoin is strongly bid today amid reports of institutional buying.
Prices across global exchanges, as per CoinDesk's Bitcoin Price Index, were last seen trading at $14,951 levels. The cryptocurrency caught a bid wave at $13,687.54 (price at 17:00 UTC yesterday) and jumped to a six-day high of $15,393.97 earlier today.
Notably, the news that Founders Fund (co-founded by high-profile investor Peter Thiel) has poured $15 million–$20 million into bitcoin (BTC) looks to have given a lift to prices of the number one cryptocurrency by market capitalization.
As reported by CoinDesk, Founder Fund's entry into the bitcoin space is not surprising. Nevertheless, the news does underscore the rising level of interest among institutional investors and thus could have pushed up bitcoin prices.
As per data source CoinMarketCap, the world's largest cryptocurrency has appreciated by 10 percent in the last 24 hours.
Despite the retreat from the intraday high, the technical charts look constructive.
The above chart (prices as per Coinbase) shows:
- Bitcoin followed the historical pattern: a sell-off from the record high of $19,891 (Dec. 17) ended around the 61.8 percent Fibonacci retracement level on Dec. 22 (marked by a circle).
- Bulls successfully defended the confluence of the upward sloping 50-day moving average and 50 percent Fibonacci retracement level ($12,701.55) over the weekend.
- A high-volume "falling wedge" reversal (bullish breakout).
- The relative strength index (RSI) has breached the descending trendline, favoring a further rise in BTC prices.
A falling wedge is characterized by lower lows and lower highs with a contracting range. An upside break (as witnessed yesterday) indicates a bullish trend reversal – i.e. the sell-off from $19,891.99 (Dec. 17 high) has ended and the bulls have regained control.
The pick up in volume yesterday indicates strong hands are at play.
The chart indicates that prices could revisit $18,000 in the short-run. However, the decline of the intraday high of $15,400 to $14,650 neutralizes the immediate outlook.
A move above $15,400 in the next few hours would add credence to the bullish technical factors listed above and could yield a rally to $16,490 (Dec. 27 high). A violation there would expose resistance at $18,149.99 (Dec. 12 high).
On the downside, only a close (as per UTC) below $12,701.55 (50 percent Fibonacci retracement) would abort the bullish view.
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