- Bitcoin’s violation of recent bearish lower highs with a move above $12,061 has opened the doors for a retest of $13,880.
- Prices reinforced the bull breakout with a successful defense of the former resistance-turned-support of $12,061 soon before press time.
- Bitcoin’s dominance rate has spiked to 27-month highs, backing the uptrend in prices.
- A high-volume UTC close below $12,000 would abort the bullish view.
Bitcoin’s break above a key price hurdle looks to have set the tone for a retest of recent highs above $13,800.
The top cryptocurrency bu market cap printed a UTC close above $12,061 on Monday, invalidating a bearish lower highs pattern created on July 4, according to Bitstamp data.
Further, with Monday’s close, BTC cemented the bullish view put forward by the strong dip demand below $10,000 observed a week ago.
More importantly, the latest breakout looks sustainable, as bitcoin’s dominance rate (percentage of the market in relation to other cryptocurrencies) has ticked up to 64 percent, the highest level since April 2017, according to data source CoinMarketCap.
A rise in price accompanied by a surge in the dominance rate indicates that investors are pouring money into the bitcoin market for a long haul and not merely to fund purchases of relatively cheap alternative cryptocurrencies.
Put simply, rise in dominance adds credence to the upward trend in prices. As a result, doors look open for a rise toward the recent high of $13,880.
At press time, BTC is changing hands at $12,600 on Bitstamp, representing 7.55 percent gains on the day. Prices hit a high of $12,883 earlier on Tuesday.
Bitcoin violated the bearish lower-highs pattern with a close above $12,061 yesterday on the back of an uptick in buy volumes (green bar).
The 14-day relative strength index is currently holding well above 50, indicating bullish conditions.
Further, the Chaikin money flow indicator, which takes into account both prices and trading volume, continues to print positive numbers – a sign of sustained buying pressure.
BTC could rise above $13,000 in the next 24 hours and extend the gains toward $13,880 (June 26 high) in the short-run.
BTC dived out of the ascending channel soon before press time, establishing a bearish lower high at $12,700.
Prices, however, soon bounced up from the former resistance-turned-support of $12,061, keeping the bulls in the game.
A break above $12,700 would further strengthen the bull grip and allow a rally to levels above $13,000, as suggested by the daily chart.
The bullish view, however, would be aborted if prices close today below the former resistance-turned-support of $12,061.
Disclosure: The author holds no cryptocurrency at the time of writing
Author: Omkar Godbole