Bitcoin Price Looks North As Trading Volumes Hit 9-Month Highs

View Bitcoin witnessed an inverse head-and-shoulders breakout on Monday and rose to $4,000 yesterday, confirming a bullish reversal on the daily chart.

The trend change is backed by a jump in trading volumes to levels last seen in May 2018.

The rally looks to have legs and December highs above $4,200 could come into play, albeit after a minor bout of consolidation or pullback, as the indicators on the 4-hour chart and daily charts are reporting overbought conditions.

A break below Monday's low of $3,614 would invalidate the bullish setup, although that looks unlikely, as longer duration charts are beginning to align in favor of the bulls.

Bitcoin could revisit December highs above $4,200 in the near-term as the recent rally is backed by a surge in trading volumes.

The 20 percent appreciation witnessed over the last 12 days is accompanied by a 28.4 percent rise in daily trading volumes, according to CoinMarketCap.

Notably, total trading volumes across all exchanges jumped 40 percent to $9.91 billion on Monday, validating BTC's bullish breakout above $3,800.

On the 4-hour chart, the RSI is reporting overbought conditions and has diverged in favor of the bears However, the stacking order of the 50-candle MA, above the 100-candle MA, above the 200-candle MA is a classic bullish indicator.

BTC's current 3-day candle looks set to close well above $3,711.

Bitcoin image via Shutterstock; charts by Trading View.