Bitcoin leaped into the green in the European trading hours, and is now looking to scale key resistance above $12,000.
The top cryptocurrency by market value jumped from $11,400 to $11,916 in the 15 minutes to 09:10 UTC, according to Bitstamp data.
With the $500 spike, BTC has put an end to directionless trading seen over the weekend, in which the cryptocurrency was restricted to a narrowing price range above $11,000.
Interestingly, the range breakout occurred three days after bitcoin’s hash rate – a measure of total miners’ performance – rose to 74.5 million tera hashes per second, representing a more than 100% rise year-on-year, according to bitinfocharts.com.
Some observers including former Wall Street trader and journalist Max Keiser consider a rise in hash rate an advance indicator of impending price rise. If true, BTC could scale the resistance of the bearish lower high at $12,061 and soon revisit recent highs.
Conversely, though, many others, including renowned analyst Alex Kruger, are of the opinion that hash rate follows price, and the former outperforming the latter is a sign of “overly exuberant” miners. As a result, expecting a bullish move to recent highs on the basis of hash rate alone could prove costly.
That said, the short duration technical charts do indicate scope for a break above $12,061.
As of writing, BTC is changing hands at $11,830, representing a 2 percent gain on the day.
BTC’s previous hourly candle closed at $11,790, confirming an upside break of the symmetrical triangle pattern created over the last four days.
The triangle breakout, a bullish continuation pattern, is backed by a rise in buy volumes (green bar) and indicates a resumption of the recovery from the July 2 low of $9,614.
Prices, therefore, could invalidate the bearish lower-highs pattern with a move above $12,061 (July 4 high).
Daily and weekly charts
Bitcoin fell 6.86 percent on July 4, taking the shine off the hammer reversal candlestick pattern created over the preceding two days.
A potential break above $12,061, as suggested by the hourly chart, would validate the bullish hammer reversal and open the doors to a retest of the recent high of $13,880.
Any move above $12,061 will likely be short-lived if trading volumes remain low.
It is worth noting that the weekly relative strength index (RSI) continues to report overbought conditions. So, the probability of a low-volume breakout trapping the bulls on the wrong side of the market is high.
Disclosure: The author holds no cryptocurrency at the time of writing