Bitcoin Traders Eye $5,600 As BTC Suddenly Ticks Higher: Can The Rally Continue?
Over the past few hours, Bitcoin (BTC) and its altcoin brethren have begun to quietly rally. As of the time of writing, BTC is up 3.5% in the past 24 hours, finding itself trading for $5,240 apiece, according to data compiled by Coin Market Cap.
This move isn’t as notable as early-April’s 15% daily gain, which saw retail and institutional trading activity ignite as BTC rallied past two key resistance levels, $4,200 and $4,600. However, the recent influx of buying pressure comes after cryptocurrencies experienced a rapid 10% sell-off during the weekend, ensuring that bears don’t get a chance to follow through.
If Bitcoin Breaches $5,600, $6,000 May Be In Store
Per a recent chart from Credible Crypto, with Tuesday’s move, BTC is poised to soon break out of a triangle pattern, which has depressed the asset and slowed trading activity over recent days. If the upper bound of the triangle breaks as Credible expects, Bitcoin could rally past its year-to-date high at $5,500, moving to and beyond $5,600 as a local resistance level is broken.
While a move past notable $5,600 doesn’t seem notable, especially considering that Bitcoin’s monthly high is just $100 below that, analysts argue that a foray above the mid $5,000s will be monumental for bulls. In fact, as a popular trader, The Crypto Dog, depicted in a chart posted hours ago, not only would a rally to $5,600 break a flat top triangle, but it would put BTC in an area of low liquidity.
Any semblance of buying pressure seen in that region could catapult Bitcoin to $6,000. As the analyst writes: “$5,600 is the only thing standing between us and $6,000.”
Charts Looking Bullish
Sure, $5,600 could be rejected, but a multitude of chartists are adamant that from a macro perspective, BTC is still looking hot. As trader B.Biddles remarked, Bitcoin’s one-week chart from August to now impeccably resembles a “bump-and-run reversal bottom” (BARR Bottom) shown in a notable technical analysis book.
If the BARR Bottom trend plays out as the textbook’s author, Thomas Bulkowski, explains, BTC will soon see an “uphill run” that will catapult cryptocurrencies into their next bull run.
Fundamental factors, too, are giving BTC and other digital assets a green light to head higher. As Cumberland, a crypto-friendly arm of DRW, noted on Twitter, as central banks have delayed interest rate hates, risk assets, like Bitcoin, have rallied. With institutions like the Federal Reserve and European Central Bank looking to continue this trend, this “risk-on” rally could easily continue.
Should Declining Crypto Trading Activity Be A Worry?
Analysts are leaning bullish en-masse, but over recent trading sessions, the level of trading activity has begun to wane. In fact, the 24-hour volume registered by Coin Market Cap has fallen to $42 billion, which is nearly half that registered on April 3rd to 7th, the aftermath of April 2nd’s bullish breakout.
It is important to note that this data provider’s figures are widely deemed inflated, but Bitwise’s Bitcoin volume index, which takes only regulated exchanges into account, has accentuated that trading is on the decline.
Should this be a worry for bulls though?
In the eyes of some chartists, yes. But if we take Biddles’ analysis into account, declining volumes could indicate bullishness. Odd, huh. As the Bitcoin trader explains, “declining volume is bullish in this pattern (ascending triangle),” and signals that a rapid move higher is likely in BTC’s cards.
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