Bitcoin is Surging Again as Price Blows Past $5,600 for the First Time Since November
Bitcoin’s price blew past $5,600 on Tuesday, confirming Hacked’s earlier forecast and signaling the continuation of a bull rally that reemerged in February. The leading digital currency is likely to face overbought resistance in the near future, which could temper the pace of the upward movement.
The bitcoin price traded as high as $5,647.40 on Bitfinex, bringing the total market capitalization closer to $100 billion. At the time of writing, BTC/USD was valued at $5,593 for a gain of 3.2%.
Aggregate data from CoinMarketCap show an average market-wide price of $5,570.66, based on the latest available information.
The rally is significant for a number of reasons. For starters, bitcoin is eyeing a bullish crossover between the 50-day moving average and 200-day MA. Based on latest price action, the crossover appears imminent.
Secondly, the digital currency is approaching the $5,700-$5,800 region, a move that could finally negate the long-term downtrend. Beyond this point, traders should be eyeing the psychological $6,000 level and $6,800 at the very high end.
As Hacked disclosed earlier this month, the path higher probably won’t see uninterrupted gains. This means traders and long-term investors should expect several big shakeouts in the foreseeable future. But based on the monthly trend model, the path of least resistance is still higher and will remain so for at least another two months.
Based on the aforementioned chart, bitcoin is considered overbought at current levels. The relative strength index (RSI) is tracking in the mid-70s, which suggests that a pullback is likely. This doesn’t negate the uptrend but signals the possibility of a modest-to-sharp pullback sometime soon.
Bitcoin Dominance Grows
Bitcoin’s dominance rate, which refers to the percentage of the total crypto market cap held in BTC, rose to 53.3% on Tuesday. That’s the highest level of the year. Typically, bitcoin’s dominance rate increases during bear-market trends or periods of uncertainty. The recent influx into BTC is a strong sign that investors are boosting their positions in anticipation of a major bull run at some point in the foreseeable future.
The bitcoin dominance rate briefly fell below 50% in March but has since tracked upward. That drop was accompanied by a market-wide rally with the largest gains concentrated in altcoins and tokens.
Investors who subscribe to the four-year cycle theory likely believe that now is as good a time as any to cost average bitcoin. They and other long-term holders believe that bitcoin will likely return to record highs and smash the previous uptrend at some point in the next three or four years.
Crypto Market Hits Yearly High
Bitcoin’s growing share of the crypto pie pushed the digital asset class toward new yearly highs on Tuesday. The combined market capitalization of all cryptocurrencies peaked at $185.5 billion. From the December low, that represents a gain of more than $85 billion.
Most of the top cryptocurrencies reported gains, though the rally was not uniform. The largest rally occurred outside the top ten, with Tezos (XTZ) surging 12.5%.
Also read Hacked’s latest Crypto Week in Review: Bitcoin’s Virtuous Cycle Continues while Small Caps Surge.
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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