Can Bitcoin break $7,000?
It is refreshing to see financial markets across the board bounce back with some bullish price action since the crash two weeks ago. In the case of cryptocurrencies, the total market cap has recovered more than $40 billion – now sitting at $185 million – and is being led by Bitcoin, itself jumping to 67.4% market dominance.
On the daily chart, BTC/USD has been gaining steadily over the past two weeks, supported by increasing volume and a bullish change in market structure. Price broke above the supply zone around the $5.6K – $5.8K level, found support and consolidated before retesting the $7K area.
However, on the 2 hourly chart, it appears that Bitcoin has once again failed to absorb the supply sitting around the $7K level. The bearish divergence, expressed as price making a higher high and the indicator lower high, in addition to the increased volume indicate that the bulls are running out of strength and that a correction is likely due.
All this is to say that despite bullish price action, it appears BTC/USD is still not ready to break higher. However, if volume does not become more pronounced on the lower time frames as well, this could result in a healthy correction within the cycle of a larger trend (since the lows).
Only time will tell.