Bitcoin's (BTC) price surpassed $7,000 early on Tuesday after 20 days stuck in a narrow range below $6,800.
The worlds largest cryptocurrency by market capitalization first moved past the $7,000 mark soon after 10:00 UTC today after trading sideways for nearly three weeks. As traders of bitcoin have come to realize, periods of low volatility often come to a boisterous end.
Bitcoin passing the psychological hurdle did not come without warning. As mentioned yesterday, bearish bitcoin futures bets had hit a record low – signaling investor sentiment was beginning to shift into bullish mode.
What's more, the market was not phased by the SEC's decision to reject several ETF proposals last week. While negative, the news failed to wreak havoc on prices, as has happened previously, and was a sign that bearish market pressure was reaching exhaustion.
After closing a 4-hour session above the elusive resistance zone of $6,700–$6,850, the bulls continued to ultimately pass the peak of the prior rally ($6,899) seen on Aug. 22. The next level of resistance currently resides at $7,165.
What's more, the price was able to close above the 200-period exponential moving average (EMA) – a feat not accomplished since Aug 4. Finding acceptance above all of the short-term EMAs signals the path of least resistance is to the upside, at least in the short-term.
A short-term pullback to prior resistance ($6,899) would be considered healthy, as price often falls back to prior resistance in order to prove it can hold as support.
The daily chart depicts a couple of bullish indications that suggest a move to around $7,600 is more than possible.
For one, bitcoin is defending its first higher low on the daily timeframe since April – a strong bullish indication since the bulls were able to defend avoid setting a new low for the year.
What's more, the 50- and 100-day EMAs are forming a bull cross, signaling that momentum is indeed shifting away from the bears. The strongest resistance on the daily timeframe lies near $7,800 – the location of the 200-day EMA and descending trendline resistance.
- The short-term trend is becoming bullish, setting the stage for a move to the prior resistance zone of $7,400
- Longer term, bitcoin setting a higher low is a bullish sign that could fuel a move towards the 200 day EMA at $7,800.
- Finding acceptance below prior resistance at $6,550 would negate the short-term bullish view.
Disclosure: The author holds BTC, AST, REQ, OMG, FUEL, 1st and AMP at the time of writing.
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