Bitcoin: Breakout Potential Strengthens as Price Approaches $4,000
Bitcoin’s price edged closer to $4,000 on Friday, supporting the view that a bullish breakout was imminent in the not-too-distant future.
The bitcoin price notched a session high of $4,012.00 on Bitfinex. It was last seen trading at $3,971.70, where it was up slightly on the day. Bitcoin’s daily chart highlights stronger momentum via the relative strength index (RSI). The price has also pushed past the 50-day moving average. Both indicators suggest that the bulls are in good position to extend their rally.
Bitcoin’s average price was seen tracking just north of $3,925, according to CoinMarketCap data. That represents a gain of 0.4%. At current values, the leading digital currency is capitalized at $69 billion.
Daily trade volumes have moderated slightly from their recent high of $10.5 billion. At last check, bitcoin’s daily turnover was worth $9.9 billion. That only represents the amount of BTC being traded on virtual currency exchanges. It is estimated that over-the-counter markets are equally as big. Exchange-based volumes for cryptocurrencies as a whole reached $31.5 billion on Friday, according to the latest available data.
Bitcoin faces a major hurdle above $4,200, which is the high from December. The price approached that level during last month’s rally but was quickly sent back as traders booked profits. This region remains the key focus for the bulls heading into the weekend.
Surging trade volumes reflect only one aspect of the bitcoin market that has seen a notable improvement in recent months. As Hacked reported last month, bitcoin’s median fees have plunged to their lowest levels since 2015. At the same time, transactions have reached their highest level in a year.
At the same time, the number of bitcoin addresses being created has risen by about 20% from the January lows. In fact, the rate of new addresses being created mirrors levels seen in spring 2018 when bitcoin was above $6,000. Read more: What Do Bitcoin Addresses, Starbucks and Lightning Network All Have in Common?
Bitcoin is also the center of a venture-capital fund headed by Morgan Creek Digital that has attracted two pension plans from Virginia. Combined, the pension plans poured $21 million into the fund, highlighting bitcoin’s potential as a long-term investment driver.
Google searches for “bitcoin” have also picked up this year, a sign that laypeople were becoming more interested in cryptocurrency. The google trend score for “bitcoin” peaked at 35 in February out of a possible 100. However, not all interest in bitcoin is considered bullish for prices. The google trend score surged to 67 in late November during the major market meltdown that followed the bitcoin cash hard fork.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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