Bitcoin is gaining altitude today, amid a sharp drop in prices of some alternative currencies.
Prices on CoinDesk's Bitcoin Price Index jumped 7 percent to an intraday high of $16,181 in the last two hours. The cryptocurrency has appreciated by 10 percent in the last 24 hours, according to data source CoinMarketCap.
Meanwhile, Ripple's XRP token has depreciated by 9 percent in the last 24 hours, having soared to new heights on Jan. 3.
Other alternative currencies like NEM (XEM), Cardano (ADA) and Stellar (STR) are down at least 12 percent each. More importantly, the XRP/BTC (ripple-bitcoin) pair has taken a beating in the last couple of hours. XEM/BTC, ADA/BTC, ETH/BTC (ethereum-bitcoin) and LTC/BTC (litecoin-bitcoin) are also losing altitude.
So, bitcoin (BTC) seems to have caught a bid wave at $14,848.10 (07:29 UTC), tracking the weakness in the cross cryptocurrency pairs (ETH/BTC, LTC/BTC, XRP/BTC) - that is, money made from the altcoin rally is likely being channeled back into BTC.
Price chart analysis also suggests BTC could extend the rally to $18,000-$18,600 in the short-run.
The above chart (prices as per Coinbase) shows:
- An inverse head and shoulder breakout. As of writing, BTC is trading well above the neckline hurdle of $15,550, so the bullish breakout is pretty much a done deal. Prices could rise to $18,600 (target as per the measured height method) over the weekend.
- Other factors - including a breach of the falling trendline, a bullish break of the falling wedge, higher lows as represented by the rising trendline - also favor further upside in BTC.
- The relative strength index (RSI) is above 50.00 (in the bullish territory) and rising, indicating scope for a rally in prices.
- BTC could cut through resistance at $16,490 and move towards $18,000-18,600 mark over the weekend.
- Bearish scenario: A failure to hold above the neckline support (former resistance) of $15,500 followed by a break below $14,230 today would open the doors for a drop to sub-$12,500 levels.
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