Bitcoin price at highest level in 6 months: where next?
Bitcoin reached a six-month high after breaking through $6000. However, with Fibonacci resistance up ahead, bulls will need to be cautious.
What has been happening to the bitcoin price?
Bitcoin appears have regained its robustness this week, with the rise through $6000 evidence that sufficient market confidence has taken shape to weather a storm. A prime example being hackers who stole $40 million worth of bitcoin from Binance on 7 May. Part of why this hack is seen to have been so threatening is simply due to the mainstream nature of the target, with Binance being one of the largest cryptocurrency exchanges.
However, despite an initial blip yesterday, we have since seen a sharp rise for the crypto posterchild, with the price of a single bitcoin now above $6000 for the first time in almost six months. With that in mind, the question is quite how far this bull run is likely to last. The weekly chart highlights the wider picture, with the price having dropped sharply into the $3000 region in December 2018. However, the price seemed to have bottomed out over the first quarter (Q1) of 2019, with the rise through $4235 ultimately marking the end of that consolidation/bottoming phase. With the price having pushed through a zone of potential trendlines, it is obvious that the rate of decline has slowed at least. The trend of lower highs and lower lows still remains intact, and while the possibility remains of another break into a new low, we are yet to see any signs of a bearish reversal. What is clear is that we would require a break through the $7315 swing high to provide a much more solid foundation for a longer-term recovery. Until then there is still a chance of another leg lower coming into play before long.
Bitcoin price technical analysis
On the daily timeframe, we can see that there is little sign of a let up for now, with the price pushing constantly against the upper Bollinger band. The ability to push through and maintain price action above that upper Bollinger signals a market that has sufficient bullish support to continue pushing upwards. However, we can also see that the price is approaching the final Fibonacci resistance level, at $6327 (76.4%). A break through that level would signal a greatly increased chance of a rally back towards the key $7315 level. However, with a wider bearish trend in place, such a breakout is certainly not a given.
With all that in mind, there is likely to be further upside for the short term. However, the reaction to $6327 will be crucial to determining the pathway for the following days and weeks for bitcoin.
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