Bitcoin Soars Towards $12k as Yuan Hits Decade Low
Bitcoin rose above the $11,800 level on Monday as People’s Bank of China (PBoC) pushed the Chinese Yuan to its decade low.
Bitcoin’s (BTC) price needs to break above $12,061 to mitigate bearish pressure.
The top cryptocurrency by market value is currently trading at $11,200 on Bitstamp, representing a 5 percent drop on a 24-hour basis.
The price drop contradicts the bullish picture painted by technical charts – the hourly chart was reporting a high-volume bullish breakout in the European trading hours yesterday.
Further, some observers called a bull revival following Tuesday’s sharp recovery from $9,600. For instance, renowned cryptocurrency trader and analyst Josh Rager tweeted Wednesday that BTC is looking “extremely bullish.”
Overall, BTC was looking primed for a rally to key resistance at $12,448 yesterday. Instead, prices topped out at $12,061 and fell back to $11,800 earlier today, charting a bearish lower-high pattern.
As a result, a high-volume break above $12,061 is needed to revive the bullish view.
The falling channel breakout confirmed July 3 ended up creating a second recent bearish lower high at $12,061; the first created June 28 at $12,448.
The failure to post big gains above $12,000 could be associated with the fact that buy volumes (gree bars) remained low even after the channel breakout.
A break above $12,061 would revive the bullish view put forward by the bearish channel breakout and open the doors to $13,880.
The move above the latest bearish low, however, need to be backed by a surge in volumes.
The 5 percent drop seen overnight took the shine off the bullish hammer reversal seen in the previous two days.
That said, prices are still holding above $10,830 – the low of Tuesday’s bullish “marubozu” candle – a bullish continuation candle, which has little or no upper and lower shadows.
So, the probability of BTC invalidating the bearish lower-high pattern with a high-volume move above $12,061 is still high.
A break below $10,830 would shift risk in favor of a drop to Tuesday’s low of $9,614.