The price of bitcoin may have hit a new all-time high above $6,000 today, but it’s already showing signs it may be primed to push higher.
At press time, the bitcoin-US dollar (BTC/USD) exchange rate was roughly $5,950, down slightly from the day’s high, but up 9 percent on the week amidst what proved to be strong demand for bitcoin in the $5,000-to-$5,500 range.
Week-on-week, bitcoin is up 9 percent, while on a monthly basis, it is up a staggering 53.66%.
Looking ahead, however, at least two underlying trends suggest it may trace higher in the days or weeks ahead.
Search volumes rise
On the back of the all-time high, Google search volume has notably shot up in the last 4 hours.
Long an indicator of potential buying (the internet-based asset is bought online mostly after all), this trend suggests the rally has attracted the attention of the investor community.
According to data from Google Trends, bitcoin search volume is near all-time highs.
The situation could easily devolve into a self-feeding cycle – i.e. more investors enter the market for its stellar returns, and end up pushing prices higher.
Volumes on exchanges so far show that they’ve risen to match. At press time, 24-hour volumes were up across all major exchanges, with British Virgin Islands-based Bitfinex showing the highest increase at just over 14 percent.
Likewise, volumes on Bithumb (BTC/KRW) and bitFlyer (BTC/JPY), two other large regional exchanges, have jumped 7 percent and 6 percent, respectively.
Weekly chart – Charting the uncharted territory
As for price action analysis, there is little reason to worry except for the overbought technical indicators. Healthy pullbacks cannot be ruled out, however, the outlook would remain constructive as long as dip demand is strong.
Key levels that could act as resistance:
- $6,000 (psychological level)
- $6,196.81 (100% Fib extension of the move from July low-August high-September low)
- $7,073 (161.8% Fib extension of move from July low-August high-September low)
On the downside, moving averages (50-MA, 100-MA & 200-MA) could work as strong support levels.
Floating lanterns image via Shutterstock