Bitcoin has rallied towards an impressive six-week high of $8,000 as a potential bullish breakout becomes increasingly likely.
The world’s largest digital asset has now risen by 17% since January 2 as positive sentiment slowly creeps back into the cryptocurrency markets.
More than $20 million in long positions were liquidated on BitMEX following the daily candle close as Bitcoin momentarily traded above $8,000 for the first time since November.
The $7,900 region remains a key level of resistance as it suppressed price on November 29. This level was also used as support on numerous occasions throughout September.
A breakout above this level would be the first step towards testing the confluence of the death cross, which is at $8,630.
A significant continuation above this region would likely trigger a bullish reversal in the price of Bitcoin – a stark contrast to the seven-month downtrend it has been in since June.
Last year was a tremendous year for Bitcoin. BTC surged from $3,800 all the way to $14,000 on the back of Facebook’s Libra announcement.
Despite proceeding to lose 50% of its value as the hype subsided, the digital asset still ended the year 100% up from the end of 2018.
During the downtrend last year, Bitcoin formed four consecutive lower highs that are typical of a bear market, while several of the top altcoins staggeringly dropped by more than 70%.