Bitcoin Price Approaches $7,000 as Momentum Builds

Bitcoin’s bullish breakout showed signs of progressing on Tuesday, as prices came within striking distance of $7,000 – a level that was last breached on Aug. 7.

BTC/USD Update

The Bitcoin price reached a high of $6,963.00 on Bitfinex, the highest in three weeks. The leading digital currency is up 3% over the past 24 hours for a total market cap of $119.4 billion.

Trading volumes have also improved, with total exchange turnover in BTC valued at $4.2 billion. With Tuesday’s gain, Bitcoin has recovered $1,000 from its most recent swing low.

As Hacked predicted on Monday, Bitcoin’s price is testing the 200-day moving average after successfully crossing the 50-day MA. Relative strength is approaching 70, which points to strong upward momentum.

The wider cryptocurrency market followed Bitcoin’s lead on Tuesday, with all major altcoins rising. IOTA’s native MIOTA token was the top performer, rising 14.9% to $0.705. EOS, Stellar and Litecoin each rose more than 4%.

At press time, the cryptocurrency market’s total capitalization was $225.4 billion, the highest in almost three weeks. Trading volumes are up 22% over the last 24 hours, according to CoinMarketCap. Since bottoming at $189 billion, cryptocurrencies have recovered $36 billion in market capitalization.

Sentiment Improves

As Hacked reported Monday, bearish bets on Bitcoin futures declined to record lows last week, a sign that the worst of the market downtrend had passed. Although the market is still in a net short position, that position totaled 1,266 contracts for the week ended Aug. 21. Overall, short positions declined by 210 contracts to 3,426, according to the latest Commitments of Traders report.

Erik Voorhees, the CEO of cryptocurrency exchange ShapeShift, recently told CNBC that Bitcoin was already showing signs of a turnaround.

“We’re done with the majority of the collapse,” Voorhees said, adding that “anything in the $5,000 to $8,000 range for Bitcoin is pretty reasonable…”

Litecoin founder Charlie Lee has alsopredicted that Bitcoin will trek toward new all-time highs in as little as six months but could take up to three-four years. The latter view is consistent with the one Hacked presented on Sunday showing that it could take another five years for BTC to return to record values.

Bitcoin touched a yearly low of $5,755 in June but has managed to spend the majority of its time above $6,000. The leading digital currency has also exhibited a tighter trading range since its most recent fall below $6,000 on Aug. 14. Bitcoin’s volatility, as represented by its daily trading range, is hovering near yearly lows.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

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