A high-volume bullish move witnessed by Bitcoin (BTC) on Friday may have led to a rally beyond $3,800.
Bitcoin (BTC) moved to $3,711 on Feb. 8, which has been the highest level recorded since Jan. 19 and closed the day with a 7.8 percent increase, data from Bitstamp shows. That also indicates the biggest single-day gain since Dec. 28
An upside break of the decreasing wedge which signals a bullish reversal pattern carved out in the past five weeks was confirmed with the rally to three-week highs.
CoinMarketCap data on Friday shows that the trading volumes increased 54.6 percent to $7.73 billion. The upsurge is an indication that the first time volume has moved beyond $7 billion since Dec. 24 and the highest reading in almost three months. Additionally, for the first time since Dec. 25, the three-day average of 24-hour trading volumes has increased well over $6 billion.
Hence, it seems the bullish breakout has legs and the 50-day moving average (MA) which has stood as a strong resistance since Friday could be cracked by prices.
BTC is trading at $3,595 on Bitstamp as at the time of the press, which indicates an increase of 8.2 percent on the January low of $3,322. Presently, the 50-day MA is marked at $3,642.
- A falling wedge breakout was confirmed on the daily indicator with the 7.8 percent increase recorded by Bitcoin on Friday. A rise in trading volumes to levels last seen in mid-November was backed by a bearish-to-bullish trend change.
- In few days to come, there are possibilities that prices could soon move beyond the 50-day moving average resistance at $3,642 and test resistance levels lined up at $3,800 and $4,000.
- The bullish setup could be invalid with a break below the Jan. 29 low of $3,322. However, that seems impossible as the bearish exhaustion which is demonstrated by falling volumes on the weekly indicator has been confirmed by the high-volume wedge breakout.