Bitcoin edges towards bullish reversal amid $7,500 breakout

The world's largest cryptocurrency by market cap is eyeing up a breakout above the $7,500 level of resistance following an eight-month downtrend

Bitcoin is on the brink of a potential breakout above the $7,500 level of resistance following a 10% rally over the weekend.

A daily candle close above the 50 exponential moving average (EMA) is the first hurdle for Bitcoin, as it has not traded above that level since November 10.

Breaking out from $7,500 would most likely spur a bullish reversal in the price of Bitcoin, although a higher high would need to be formed above $10,500 for the market to enter a truly bullish phase.

Bitcoin has been locked in a bearish trend since June’s high of $14,000, with consistent lower highs coupled with a death cross on the daily chart after the 50 EMA crossed the 200 EMA to the downside for the third time since 2014.

From a bullish perspective, Bitcoin has respected and shown strength from the $6,500 level of support, with two bullish wicks leading to 22% and 17% moves to the upside.

However, if Bitcoin is rejected at the current level, it could well slump back towards the $6,500 level of support, which will get weaker with each touch.

The most critical bullish indicator for Bitcoin would be an influx of volume, which has been in a significant decline since November 23.

A fundamental news event would be needed to drive volume higher though, as it’s likely that the upcoming halving event is already priced in.

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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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