Having landed on Wall Street with a bang, bitcoin is solidly bid and looks set to scale new heights.
As per CoinDesk’s Bitcoin Price Index, the world’s largest cryptocurrency by market capitalization rose to a high of $16,773.04 at 08:00 UTC today, and was last seen trading at $16,500 levels. Going by CoinMarketCap data, bitcoin (BTC) has appreciated 16 percent in the last 24 hours.
It hasn’t all been smooth sailing this week, however. Following all-time highs on Dec. 8, prices fell to $13,000 yesterday before recovering to $15,700 at the time of bitcoin futures launch on the CBOE.
Approximately four hours after the debut, the BTC contract on the CBOE (which expires in January) spiked 20 percent and triggered two trading halts. Further, a surge of traffic to the CBOE website caused delays and outages, but failed to deter the cryptocurrency from regaining altitude.
With doors now open for mainstream investors, BTC is showing no signs of slowing down. The price chart analysis indicates the path of least resistance is on the higher side.
The above chart shows:
- The previous three daily candles (as per UTC) have long tails (big gap between the intraday low and close), indicating strong dip demand.
- The bullish follow-through seen today validates the bullish case put forward by the long-tailed candles.
- Also, a close today (as per UTC) above $16,500 (Dec. 9 high) would negate the bull market exhaustion as indicated by yesterday’s doji candle.
- The rising lows pattern is intact, as highlighted by the ascending trend line.
- Also, a bullish flag breakout (dotted lines) has been confirmed. This is a continuation pattern – i.e. it indicates the rally from Nov. 29 lows below $8,600 has resumed. As per the measured height method, the bull flag breakout has opened up the doors for a possible rally to as high as $20,000.
- Stochastic does show overbought conditions, but the relative strength index (RSI) shows plenty room for a rally in bitcoin.
- Bitcoin is likely to break above $17,364.56 (record high as per Bitcoin Price Index) and move towards $20,000.
- Any pullback is likely to be capped around $14,000, courtesy of the upward sloping 10-day moving average.
- Only a sideways action for the next couple of days, followed by a close (as per UTC) below $10,000 would signal that a top has been made.
Straight road image via Shutterstock
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.