Bitcoin Price Rallies Higher but Must Hit $8K to Start a Bull Market
Bitcoin (BTC) closed the week up 15.4% at $6,775 and has started the day with a further 6% move to the upside, breaching the $7,000 handle and making highs at $7,300.
Looking at performance relative to its peers, Ether (ETH) and EOS have posted an impressive 16% gain over the last 24 hours. As a result, Bitcoin dominance is down 1.5% at 65%.
Crypto market daily price chart. Source: Coin360
The total cryptocurrency market capitalization breached the $200 billion level, breaking from the diagonal resistance dating back to February when the total market value briefly touched $300 billion.
Total Cryptocurrency Market Capitalization chart. Source: TradingView
The cryptocurrency market as a whole is up 86% off its lows of a little over $100 billion but still down 30% from its 2020 highs. This highlights the volatility in the market over the last few weeks.
Bitcoin weekly timeframe
BTC USD weekly chart. Source: TradingView
Bitcoin closed the week with a large bullish candle after continuing to find buying interest at the 200 week moving average (WMA). The 100 WMA halted progress at $7,000 but the Stochastic relative strength index oscillator has crossed bullish and shows momentum is still favoring the bulls.
Trading volume continues to decline, but it remains higher than average. For context, we can see that buying interest last week was similar to that seen in October 2019 when Bitcoin catapulted from $7,200 to $10,400. This would suggest that there is still strong buying interest in the market.
Above the 100-WMA is a cluster of resistance, along with the 20-WMA which typically defines whether Bitcoin is in a bull or a bear market. In addition, both the 100 and 200-week moving averages are in this area and both have played an important role as resistance in the past.
Amongst the moving averages is also the yearly pivot point at $8,100, so if the bulls can continue their progress through the 100-week moving average, there is little resistance to the upper $7,000s.
Bitcoin daily chart
BTC USD daily chart. Source: TradingView
As shown on the daily timeframe, Bitcoin broke through the previous trading range highs and also the 100 WMA after finding support on the point of control at $6,600. The MACD indicator is showing a clear trend continuation to the upside and about to cross its zero line meaning that the 12 and 26 EMAs on price are about to cross bullish on the daily timeframe.
If Bitcoin can close the day across $7,200 it would clearly signal that bulls are in full control after printing a higher high after a succession of higher lows. This would imply that the path is clear until the resistance around $8,000.
Bitcoin 4-hour chart
BTC USD 4-hour chart. Source: TradingView
The 4-hour chart shows that Bitcoin price is currently across the 100 WMA which has been providing resistance at the top of the trading range. The volume profile visible range (VPVR) shows that there has been very little volume traded at prices up to the next price interest zone of $7,850 where the 20 WMA also lies.
The MACD is crossed bullish and is printing higher highs on its histogram which demonstrates momentum in price remains bullish.
Furthermore, the Chaikin Money Flow indicator (CMF) which looks at the amount of Money Flow Volume over the last 20 periods shows that there is a bullish divergence within the volume. This is indicative of relative buying pressure.
It is clear from the current price action that there is little selling interest and buyers are in control. Traders in profit on short positions or shorting the trading range appear to find that there is little supply above.
CME Bitcoin Futures Commitment of Traders chart. Source: TradingView
The CME Commitment of Traders report issued on April 3 showed that institutionally sized traders once again reduced their net short position in the market.
While the global economic markets continue to face unprecedented uncertainty around monetary policy, Bitcoin could prove to be an attractive vehicle to safeguard against both inflation and counterparty risks which were not present only a short time ago.
$8,000 is the key level the bulls need to reclaim before the market could be considered as being back in a bull market.
With little over a month to go until the halving and little selling interest at current prices, Bitcoin continues to look up at the key resistances, but despite the swift recovery from $4,000, the markets remain a shaky environment in which to be a bull.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.