Bitcoin on the Verge of Making its First Higher High in Over a Year

Since the beginning of the bear market, Bitcoin has been unable to form a higher high. Descending patterns of lower lows have prevailed throughout the entirety of the bear market.

After forming a textbook bull flag, Bitcoin has now formed solid momentum and has reached the 4k level. While there is strong resistance at the 4k and 5k levels, Bitcoin’s buying momentum appears to be confirmed due to the recent spike in volume. On February 8th, 2019, total volumes across exchanges bottomed out at roughly $14 billion. Today this figure is up to $27 billion. The graph below displays volume, courtesy of Mati Greenspan, Senior Market Analyst at eToro.

If the bulls can break above the 4.1k – 4.2k level, Bitcoin will create a higher high on the weekly chart. This would be Bitcoin’s first higher high in over a year. While there are reasons to be optimistic about Bitcoin’s price in the short term, it is important to acknowledge the amount of failed reaction rallies which have occurred over the course of the bear market. The chart below outlines these rallies, many of which experienced 30% increases before being rejected to new lows. Since the start of the recent rally, Bitcoin is up roughly 17%. Price could increase an additional 20%-30% and still be rejected further only to continue the bear market macro trend.

Earlier this week, Bitcoin long bets came close to 11-month highs and have since dropped off, possibly indicating trend exhaustion. In addition, the RSI on the 4hr is currently at 81, well into overbought territory. As a result, the bulls may face a tentative pullback before a possible retest of the 4k resistance.

From a psychological perspective, it could be possible that Ethereum served as the catalyst for the rally as its expected hard fork draws near. Subsequently, ETH could dump prior to the fork and end up resulting in a ‘buy the rumor sell the news’— type scenario. On the other hand, the recent news of JPM coin may have reinvigorated Coinbase retail money. If retail money assumed cryptocurrencies were dead, the recent news of JPM coin could have rekindled their speculative interest. At the end of the day, the price only increases because more people buy than sell.

Disclaimer: Charts are from tradingview.com. I am not a financial advisor. This is not financial advice. Please do your research independently and make objective decisions. This article is intended to educate readers on the recent state of the cryptocurrency market. The author of the article owns cryptocurrency.