After today’s breakout, bitcoin (BTC) now needs to move above crucial resistance near $5,200 to solidify the case for a longer-term bull market.
The world’s largest cryptocurrency by market capitalization crossed the last bearish lower high of $4,236 (Dec. 24 high) at 04:30 UTC Tuesday and jumped to $5,080 – the highest level since Nov. 19 – confirming a transition from a bear to a bull market.
The rally to a 4.5-month high was accompanied by a surge in 24-hour trading volumes to above $15 billion – the highest since mid-January 2018, according to CoinMarketCap. The bullish reversal, therefore, looks sustainable.
Further, the spike witnessed today has reinforced the positive trend change signaled by both the weekly moving average convergence divergence (MACD) and the money flow index a few weeks ago.
While the path of least resistance is now to the higher side, the bulls now face taking out the former support-turned-resistance of the 21-month exponential moving average (EMA), currently lined up at $5,200.
The persistent defense of that average support in the five months to October 2018 had triggered hopes of a strong bullish move. More importantly, a convincing break below that technical line on Nov. 14 invited strong selling pressure.
So the bulls need to force a convincing break above the 21-month EMA before claiming a complete victory over the bears.
As of writing, bitcoin is changing hands at $4,800 on Bitstamp, representing a 15 percent gain on a 24-hour basis.
Other major cryptocurrencies like ethereum’s ETH token, XRP and EOS are up at least 5 percent each. Meanwhile, names like litecoin, cardano and monero are flashing double-digit gains.