Bitcoin jumped in price this week, with optimism returning the market for the world’s largest cryptocurrency to above-$7,000 levels, reversing the bear market that has been in place for much of 2018.
Bitcoin bulls drew a temporary sigh of relief as prices rebounded above $7,370, reaching $7,465 at the time of writing. After adding $600 in the space of just half an hour, the charts now show potential for a more sustained revival in the currency’s value.
Analysts are projecting the rise could be the start of a new rally in bitcoin prices, with technical indicators pointing to a bias in favour of bulls within the market.
The Exponential Moving Average pitches where the price of bitcoin should be in neutral market conditions, based on momentum and price. As a result, the measure is often used as a benchmark for highlighting changing trends. However, with the price growth this week, the EMA has been breached, indicating a breakout in market price that suggests an unexpected growth in trading levels.
Similarly, Fibonacci extensions and retracements, another charting tool used by crypto analysts and traders, where moves in the underlying price are showing a bias in favour of market bulls.
Trading volumes are also on the rise, reaching their highest levels in over three months earlier this week, in a sign many read as indicating the ‘stickiness’ of post $7,000 trading.
Taken together, these indicators suggest investors are right to be optimistic about bitcoin in the short term, with many predicting further rises on the way.
The news comes after a challenging few months for bitcoin prices. After falling from their heights of late 2017, bitcoin prices have languished around much lower levels for a period, with investment volumes declining relative to activity in other cryptocurrencies.
However, with prices now trading significantly higher on the week, and with the technical indicators suggesting a return to strength for the world’s leading cryptocurrency, the development is likely to remain positive across the whole cryptocurrency sector.
It remains to be seen whether this new-found optimism continues to help bitcoin prices regain their lost ground.