Bitcoin Bulls Maintain Their Grip as Market Holds Near Monthly Highs
Bitcoin failed to make new highs on Tuesday, but the market is retaining its bullish bias according to the technical charts.
The bitcoin price clocked highs of $7,350.20 on Bitfinex as trade volumes declined sharply. At press time, BTC was offered at $7,310 for a gain of 0.6%.
Tuesday marked the third consecutive day that bitcoin held above $7,200. According to Michael Moro of Genesis Trading, maintaining current levels is the key to bitcoin’s future growth.
A look at the technical indicators suggests bitcoin is still in an uptrend. Price action is strengthening, with the 50-period moving average tracking sharply higher according to the 4-hour chart. The bullish crossover with the 200-period MA was confirmed on Aug. 31. Since then, BTC has found a new trading range above $7,000.
Momentum is also on the side of the bulls, with the relative strength index (RSI) holding above 60 for four consecutive days.
Bitcoin’s trading volumes amounted to $3.9 billion across all major exchanges, according to CoinMarketCap. That’s down from a high of $4.7 billion over the weekend.
Bitcoin’s share of the overall cryptocurrency market has returned to 53% as altcoins and tokens posted minor gains on Tuesday. At the time of writing, the total value of all cryptocurrencies in circulation was $237.7 billion on trade volumes of $11.9 billion.
Bitcoin’s Next Move?
Although predicting bitcoin’s future moves is notoriously difficult, the digital currency has recovered 22% of its most recent swing low. The combination of low volatility, large cash buyer support and declining short positions in the futures contract suggest that a new high could emerge in the not-too-distant future.
Bitcoin’s bullish bias suggests that the market may have found a new price floor near $7,000. For a sustained rally to occur, bitcoin needs daily trade volumes of at least $4 billion. The market has fallen just short of those levels in recent days.
In terms of next major targets, the bulls are eyeing $7,500 as the next inflection point. A break above this level could lead to a sustained run at $8,000, a level that has eluded the bulls since late July.
As Hacked reported on Sunday, where bitcoin goes, other cryptocurrencies will follow. This trend will continue so long as bitcoin retains more than half of the crypto market cap.
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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