Bitcoin Back Above $7K as a Higher Low Can Spark an Explosive Move
Bitcoin price back above $7,000 and rising BTC dominance looks increasingly bullish as several resistance levels stand in the way of a definitive breakout.
Bitcoin dominance remains above 68% and looks like it’s on its way to grab 70% of the market share of the total cryptocurrency market capitalization.
Cryptocurrency market 24-hour view. Source: Coin360
Bitcoin Dominance Chart. Source: Coin Market Cap
The 4-hour chart shows Bitcoin having had a large bounce from $6,850, completely engulfing the previous day’s bearish price action sending Bitcoin below $7,000. The move higher meant reclaiming the point of control, which has been acting as an area of support and resistance.
Bitcoin price action remains with a diagonal resistance on lower time frames, which has led to the testing of the $6,000s. So far, this area has been one of demand and is showing signs of showing a higher low, which would imply that buyers remain interested in this area for now, although volume continues to subside suggesting that a bigger move is in the works.
BTC USD 4-hour chart. Source: TradingView
For the bulls, the diagonal resistance currently in the $7,400s must not only be overcome but also close above this level. Weekly resistance remains overhead at $7,555 and has not closed above it since the beginning of November.
These two levels of resistance are key for the bulls to surpass and it seems likely that a higher low from the upper $6,800 could be a catalyst for an explosive move.
Bitcoin’s day candle shows as bearish engulfing with a clear higher low, which is an encouragingly bullish sign. It is worth noting that despite the apparent higher low, Bitcoin has failed to close a higher high at these prices. So again, $7,400 is an important level.
The majority of price action has taken place between the point of control and weekly resistance with low volume dips in price below being bought up.
BTC USD 1-day Chart. Source: TradingView
The moving average convergence divergence indicator, or MACD, is printing a higher high on the histogram while it is also crossed bullish with its signal line, highlighting the increase in bullish momentum off the back of this move.
However, the MACD line remains below zero for now meaning the underlying 12 and 26 exponential moving averages are currently yet to cross bullish.
The RSI continues to trend up above 50 having built on a bullish divergence, which is a bullish sign in this period of consolidation.
BTC USD 1-day chart. Source: TradingView
If Bitcoin were to build upon the bullish price action and break diagonal resistance, the decreasing volume gives support fo