Bitcoin Returns Above $10,500 as Bearish Pressure Subsides
Bitcoin’s price extended its recovery on Wednesday, climbing back above a key technical level and signaling the end of the most recent downtrend. In the process, bitcoin’s dominance rate continued to rise as demand for altcoins weakened across the board.
The bitcoin price peaked at $10,656.41 on Bitstamp, its highest in two weeks. At the time of writing, BTC/USD was holding above $10,528, down 0.8% during the session but having gained 1.6% over the 24-hour cycle.
Bitcoin has been trekking higher in the last few days, with price action continuing to move in a positive direction. The largest digital currency is back above the 30-day exponential moving average (EMA), which has served as a key level during the bull market.
After plunging below 40, the relative strength index (RSI) on the daily chart is fast approaching the mid-50 region. Any RSI reading above 60 signals bullish underlying momentum.
At current values, bitcoin’s market capitalization has reached $188.5 billion. Daily trade volumes were reported at $18.7 billion, though more accurate data from Bitwise suggests real turnover is $1.4 billion.
The Last Area of Supply/Demand
Under pressure for the last two months, bitcoin must clear $11,983 to avoid another lower-high formation, according to cryptocurrency analyst Josh Rager.
On Tuesday, Rager tweeted that bitcoin is fast approaching the monthly resistance of $10,760. Less than 24 hours later, the cryptocurrency came within $106 of that level, as reported above.
“To break the trend and close a higher-high, we want to see price break the last level at $11,983
This is the last major area of supply/demand in 2019 and can assume for price to retest yearly highs after a close above”
Bitcoin peaked north of $13,800 in late June before undergoing a major correction. The reversal happened in waves and eventually bottomed out in the low $9,000 region. Bitcoin tested that low in July but hasn’t returned to it since.
The slow grind higher in bitcoin’s price is a sign that major players are re-accumulating after taking profits near $14,000. If that’s the case, there’s a reasonable chance that bitcoin could rocket higher in the coming months, perhaps targeting Max Keiser’s recent projection calling for $15,000.
IMO, this seems just like one large re-accumulation happening after large players took profits near $14k
Price could drop down again but it's highly unlikely it falls below the 20 MA (blue line) at high $8ks now
ATM, I'll take my chances at scaling in slowly week by week pic.twitter.com/XJ4eiysgFn
— Josh Rager 📈 (@Josh_Rager) August 17, 2019
In terms of trading catalysts, the launch of Bakkt’s physically-settled bitcoin futures contract later this month is being heralded as one of the most important developments in crypto history. Unlike other futures products, Bakkt settles contracts in actual bitcoin.
Bakkt’s “end-to-end regulated marketplace” officially launches on September 23 more than a year after it was originally announced.
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.
Featured image courtesy of Shutterstock. Chart via TradingView.