Holiday Rally? Bitcoin Jumps 10% on Price Record Anniversary

BTC, which had been ignoring extreme oversold conditions for weeks and struggling to pick up a bid, suddenly jumped to an eight-day high of $3,590 from around 12:00 UTC. As of writing, the cryptocurrency is changing hands at $3,450 on Bitstamp.

With the bounce, BTC has not only validated the oversold readings on the 14-week relative strength index, but also established a bullish reversal pattern on the widely followed three-day chart.

BTC has created a bullish outside reversal candle, meaning the price action seen during the three days to Dec. 17 engulfed the previous three-day candle's high and low.

Further, the relative strength index has created a bullish divergence in oversold territory below 30.00.

As a result of all this, BTC looks likely to rise well above $3,590 ahead of Thursday's close.

BTC closed on the daily chart yesterday at $3,596, confirming both a falling wedge breakout - a bullish reversal pattern - and a bullish divergence of the 14-day RSI. The 5- and 10-day exponential moving averages have also bottomed out.

BTC could therefore attack the recent lower high of $3,633 in the next few days and extend gains toward $4,000.

View Bullish indicators on both the 3-day and daily charts likely indicate that the tide has turned away the bears, at least for the short-term.

BTC looks set to cross the resistance at $3,633 and could rise toward the psychological hurdle of $4,000 in the next few days.

The short-term bullish setup would be invalidated if BTC finds acceptance below Monday's low of $3,181.