Since the start of 2018, bitcoin prices have fallen back significantly amidst bear market conditions. Fear of bitcoin being overhyped in late 2017, coupled with the start of futures trading and a maturing bitcoin ecosystem created the perfect storm for cryptocurrency investors. Virtually all crypto markets were subsequently weighed down by negative trading sentiment.
However, with a surge in trading volumes for bitcoin in recent days, there are now firm signs of a breakout. This is something that some analysts are predicting could herald a return to prices of $4,200 over the coming days.
Bitcoin is currently trading at $3923, up 1.00% on the day at the time of press. Trading volumes have also shot up over the last few days. In fact, they have reached similar levels to those seen back in May 2018. As a result, analysts are now predicting bitcoin will continue to push north over the near term. This presents an opportunity for traders speculating on bitcoin’s value.
CoinDesk analyst Omkar Godbole said technical indicators were suggesting momentum was with the bitcoin bulls.
“Bitcoin witnessed an inverse head-and-shoulders breakout on Monday and rose to $4,000 yesterday, confirming a bullish reversal on the daily chart. The trend change is backed by a jump in trading volumes to levels last seen in May 2018.”
“The rally, therefore, looks to have legs and December highs above $4,200 could come into play, albeit after a minor bout of consolidation or pullback, as the indicators on the 4-hour chart and daily charts are reporting overbought conditions. A break below Monday’s low of $3,614 would invalidate the bullish setup, although that looks unlikely, as longer duration charts are beginning to align in favor of the bulls.”
The news comes following a return of the bitcoin price to its 5-week high of $4,000 yesterday, along with a 28.4% increase in trading volumes over the period.
The reversal coincides with increasing investor interest in bitcoin. In part, this is as a result of the maturing market and supporting ecosystem for the cryptocurrency.
Institutional investors are more actively considering cryptocurrencies like bitcoin than ever before. There is the possibility of further ongoing support in the market, which could spell good news for those holding BTC.
As always, volatility will remain. However, the bitcoin price looks poised for its next significant rally. Especially the trend seemingly heading back towards growth.