Trading volume of BTC rose, the bulls are starting to get control of bitcoin

Bitcoin is preparing to conquer the mark of $7 000 after a significant change in a key moving average on July 16. Yesterday BTC has reached a six-day high price of $6 600 for Bitfinex, up by 3.44% for the day.

At the weekend, the cryptocurrency rose to $6 400, as expected, despite the low participation of investors. For example, on Saturday, the price rose above $6 300, but trading volume fell to $2.92 billion, the lowest level since November 7.

However, a solid move above the 20-day moving average (MA) to $6 400, which was observed yesterday, is supported by a rise in trading volume. Yesterday it reached $4.64 billion – almost 50% more than during the 36-week low on Saturday. Today, the volume reached $4.94 billion, and the price of bitcoin rose to $6 724, rising to 5.22%.

Daily chart July 16

The recovery of the BTC with $6 080 (low of Thursday) and rally up to $6 600 has led to the creation of yet another higher low (a bullish pattern) on the chart. The relative strength index (RSI) is also shifted to the bulls (above 50.00).

Thus, prices look ready to overcome the mark of $6 838 (reverse «bullish» model «head and shoulders»). Essentially, BTC is now creating the right «shoulders» for this model. However, it makes sense to be careful, because the cryptocurrency market looks overbought in accordance with the schedules of short duration.

The four-hour chart July 16

RSI is at its highest level since April 24, which means that the indicator of «overbought» crypto-currencies reached the highest level in almost three months. Therefore, in the coming days, rising above $6 838 may be short-lived.

Brief summary:

  • BTC rally has gathered pace, and prices in coming days could rise to $6 838.

  • A daily close above $6 838 confirm the short-term change of bearish trend to bullish and open the possibility to increase to $7 920.

  • Only a daily close below $6 400 (20 day MA) will eliminate the chances of BTC to rise to $6 838.

  • A drop below $5 755 (24 June) will once again put the bears in control.

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