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The bitcoin price finally broke above an extended resistance channel to establish a new yearly high above the psychologically-significant $5,000 mark.
Coinbase data shows that BTC/USD spiked during the early Asian trading session, surging almost 23 percent in just two hours to $5,120. The rally accompanied substantial volume, confirming a positive breakout scenario for the cryptocurrency. It also negated some portion of the losses caused by the notorious bitcoin cash hard fork, which prompted the previous crash in November last year.
On the technical front, the latest crypto market rally pulled bitcoin out of an overlong long bearish stretch below $4,414. It further rattled three strong bearish indicators, as discussed in our previous analysis, that had prevented the cryptocurrency from extending its upside momentum since November.
As of 12:25 UTC, the bitcoin price was trading at $4,794, down 6.07 percent from its intraday high. At the same time, bitcoin’s market capitalization had surged from $73.85 billion to $84.21 billion.
The Bullish Case for a $6,000 Bitcoin Price
There is no denying that the ongoing crypto market surge is almost too sudden. But unlike altcoins, a price rally in the bitcoin market is historically more durable from an intraday perspective. The jump has certainly brought $6,000 back in the conversation of bitcoin bulls.
The level supported the cryptocurrency on multiple downside attempts until the November capitulation broke it. The fact that bitcoin came hundreds of dollars closer to $6,000 could influence traders to keep one eye open towards it.
That’s pure fundamental talk. Let’s check the technical.
BITCOIN PRICE TESTING WEEKLY RSI TARGET | SOURCE: TRADINGVIEW.COM, COINBASE
Bitcoin’s Relative Strength Index (RSI) on the weekly chart is finally attempting to push above a crucial borderline at 53.85. Historically, the bitcoin market stayed on a bullish path when its weekly RSI was above 53.85. The early 2018 price action brought the RSI level below the said figure. With it, the bitcoin price also entered one of its most extended bearish periods. It is the first time since February 2018 the RSI has touched 53.85.
A little above the RSI, one can also notice the 50-period EMA. The blue curve appears to be the only considerable resistance level as bitcoin price extends its uptrend. Interestingly, breaking above the 50-period EMA will also push the RSI above 53.85 – towards an area that has not known any strong resistance in recent times. That’s one part of the bullish perspective that explains how the cryptocurrency could reclaim $6,000.
Conversely, the bitcoin price could pull back from the 50-period EMA and find support towards the rising trendline in blue.
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