Bitcoin markets are reflecting some strong technical indicators this week, with some analysts suggesting prices could be heading back towards $6,800 over the short term.
To the time of press, 24 hours of bullish activity have helped strengthen prices at $6,520, with several different indicators now pointing to a further increase on the horizon.
The 14-day relative strength index is up to 59.04, setting new highs since September. This is a measure of the speed of changes in price, with results above 50 suggesting a dominance of bulls pressing the price upwards.
As a result, bitcoin markets now look to be their most bullish in months, which would support buy signals for those preparing to invest in bitcoin. In the last 24 hours, prices have already increased by 1.5%, up around $100 on Wednesday.
The relative strength index is corroborated by other signals which point to a bull bias in the market. Both the five and 10 day exponential moving averages are trending upwards, with a confirmed technical breakout if prices close above $6,500 on Wednesday.
However, some analysts have suggested that if prices were to fall back to $6,400, this could indicate a weakening of support amongst bitcoin bulls.
Bitcoin markets are notoriously volatile, and while the impact of volatility has been less severe in 2018 so far than in 2017, there is still scope for significant price movements in either direction.
While technical analysis based on price charts can never be 100% accurate, there are multiple indicators at the moment which suggest bullish market conditions are likely to prevail.
Bitcoin has had a challenging year after the highs of late 2017, with prices struggling to regain the same levels witnessed at the turn of the year.
However, the general direction of travel has remained largely positive for bitcoin, at a time when increasing interest from institutional investors is driving much of the price agenda.
Some analysts expect 2019 to see significant movement in bitcoin prices, as institutions like banks and hedge funds become increasingly confident about bitcoin and cryptocurrency investments – so regardless of whether the short term picture is bullish, there is still scope for growth in bitcoin prices over the coming months.