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article imageBitcoin bursts through the $6,000 level pleasing the bulls

By Ken Hanly     May 9, 2019 in Technology
Bitcoin rallied today and after beginning 24 hours ago below $5,900 has pushed up to above the $6,000 level and it looks as if the recovery is being sustained.
CoinDesk analysis
Omkar Godbole has an article at CoinDesk updated at 13:51 UTC today which analyses the price movements of bitcoin (BTC) so far today. Godbole says that the charts indicate that BTC's recent rally is sustainable. Bitcoin's dominance is rising and this suggests that investors are bullish. Godbole notes that the price of one bitcoin hit $6,099 earlier in the day according to Bitstamp data. Note that his figure is higher than that in CoinDesk data since CoinDesk uses an average from several exchanges. This is the highest level since back last year on November 14.
Bitcoin market dominance rising
The dominance figure tracks the percentage of the total cryptocurrency market capitalization represented by bitcoin. This has jumped to 57.14 percent the highest in 8 months according to CoinMarketCap data. The rising dominance shows that the demand for bitcoin is greater than that for other cryptocoins or altcoins as they are called. It shows investors are buying bitcoin not just to use to buy altcoins but for the long haul.
From back on April 1 when it was near $4,000 BTC has risen almost 50 percent and this has been accompanied by an increase in the dominance from 50 percent to its present 57.14. Exchange rates between BTC and major altcoins such as Ripple, Cardano, Neo and others have hit lows for the year this week. If the dominance rate had not risen the present rise in BTC could have been seen as a speculative bubble in which investors moved funds through bitcoin to purchase cheaper altcoins in a bid to make a quick speculative profit. However investors are keeping the bitcoins suggesting they expect it to rise further.
A flow toward bitcoin is usually viewed as the beginning of a bull run. For example, the dominance rate rose from 38 percent to 66.5 percent in the second half of 2017 when prices soared from $1,700 to $20,000. The recent rise in the dominance rate could very well be seen as confirming a new bull market. Over the last few weeks a number of technical studies have also reached the same conclusion.
Bitcoin could extend its rally to challenge the November 7 last year high of $6,554. However, there could be a temporary pullback should BTC fail to cross the resistance band of $6,055 to $6,100 within the next couple of days.
Daily chart
The chart shows that BTC closed above the June 2018 low of $5,780 on Wednesday. This invalidates the bearish candle that had been created the day before and established another high above $6,000 a bullish result. However BTC is struggling to break through the resistance band of $6,055 to $6,100. BTC had clocked numerous daily lows in that range in September and October of last year. If bitcoin breaks through this band this would open the door to reaching $6,500. If there are repeated failures to break through this resistance there could be a pullback to the ascending 10-day moving average that is $5,633 at present.
Should prices find acceptance below the 30-day moving average presently at $5,365 this would further weaken the bullish scenario. However, the long duration charts look biased towards the bulls.
Present situation
24 hours ago BTC was trading at $5,888 according to CoinDesk data. Since then it has reached a high of $6,078 with a low of just $5,845 so the trend has been up most of the day. Even at 15:52 Central Daylight Time the price it still $6,072 not far off the highs of the day. This is a gain of $184 or over 3 percent on the day. The present price of bitcoin as well as major altcoins can be found here. The altcoin market is mixed with some coins up and others down.
The news that $41 million in bitcoins was stolen from a major exchange did not force bitcoin down but BTC has bucked the bad news and continued upwards for now.
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