Bitcoin Breakout May Be Ahead as Technicals Show Rally Extension

Bitcoin bulls looking for a catalyst that could extend its colossal rally may want to turn to technical analysis favored by some traders for a dose of good news.

Following an increase in prices over the last two days, Bitcoin has surged above its upper Vera band limit, which identifies upward or downward trends. The move indicates a sharp rise could be on the horizon as the token continues to trade above that limit.

Bitcoin’s followed a similar trend since mid-February and has breached yearly highs at least once every month since then. The cryptocurrency broke above its upper band limit for the first time this year in early February, for instance, and reached a fresh yearly high shortly afterward. It happened again in mid-June, and Bitcoin hit its 2019 high of $13,851 just three days later. Overall, Bitcoin is up more than 220% this year.

“Bitcoin looks like it could be coiling for a big breakout as institutional interest for blockchain technology shows no signs of slowing down,” said Edward Moya, chief market strategist at Oanda Corp. in New York. “The bubble-like gains this time are driven on solid institutional interest and while security is still a big risk, it appears Bitcoin has overcome many of its initial growing pains.”

It’s a drastic turnaround from where it was just six months ago, when prices languished around $3,500 and many left the space for dead following its spectacular 2018 crash. But excitement over wider mainstream acceptance, among other things, has heightened the buzz around cryptocurrencies — and prices have skyrocketed since then.

“The revival has been a natural reaction to changing crypto-friendly atmosphere in mainstream finance and pro-market forces,” said Christel Quek, chief commercial officer at Bolt Global, a mobile streaming platform and wallet, adding that the entry of companies including Facebook Inc. and JPMorgan Chase & Co. into the cryptosphere has contributed to that wider acceptance. “The support from mainstream entities will propel digital tokens forward.”

Bitcoin rose 7.9% to $11,899 as of 11:53 a.m. in New York on Monday. Rival coins also gained, with Ethereum up nearly 8% and Monero rising more than 13%.

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst - The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geopolitical events and monetary policies around the world. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC and Bloomberg, and is often quoted in leading publications including the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University.
Ed Moya