Bitcoin surged with a stunning 5% rally to the upside on Wednesday, going on to test the $9,650 level of resistance as it looks to build momentum before setting its sights on the psychological $10,000 price target.
It has since been flirting with a breakout following yesterday evening’s daily candle close, which provided the first marginal higher high since it shot to $14,000 in June.
After rallying to its yearly high, Bitcoin slumped into a bearish market trend with four consecutive lower highs at $13,200, $12,400, $11,000 and $10,300.
This resulted in an eventual decline towards December’s local low of $6,410, which coincidentally came exactly two years after Bitcoin achieved its all-time high of $20,000.
If Bitcoin can continue to rally over the weekend it will almost certainly test the psychological level of $10,000. A break above here would see the world’s largest cryptocurrency establish a truly bullish trend with upside targets emerging above $11,300.
One key technical aspect from the past week is that a golden cross has come into fruition on the daily chart, with the 50 EMA crossing the 200 EMA to the upside.
The previous time this happened was in April 2019 when Bitcoin was trading at $4,800, it went on to rise by 195% in the following two months.
Eyes on halving
The recent rally, which has seen Bitcoin skyrocket from $6,400 to $9,700 in six weeks, has been attributed to the upcoming halving event.
Bitcoin’s block reward halving will commence in May, with miners seeing rewards for each block slashed from 12.5 to 6.25.
This has historically caused a tremendous upswing in the price of Bitcoin and other cryptocurrencies as miners are incentivised to hold rewards, thus reducing supply amid rising demand.
Miners also need to ensure the price of Bitcoin trades at a level where the industry remains profitable in order to cover