Bitcoin Sets Sights Above $10K After Bull Breakout

Following a bull breakout last night, bitcoin (BTC) looks set to test $10,000 and could possibly move higher over the weekend.

Bitcoin closed yesterday (as per UTC) at $9,759 on Bitfinex – the highest daily close since March 7 – signaling the upside break of the week-long narrowing price range we've been anticipating.

The cryptocurrency also clocked a two-month high of $9,875 yesterday. At time of writing, BTC is changing hands at $9,776 and remains on the hunt for a big break above the $10,000 mark, as indicated by the bullish setup in the technical charts below.

The chart above shows a pennant breakout (bullish continuation pattern), indicating that the rally from April lows below $6,500 has resumed.

The move has opened the doors for a rise to $10,455–$11,950 (target calculated using two variations of the measured height method).

However, the 4-hour relative strength index (RSI) is close to moving above 70.00, signaling overbought conditions. As a result, a rally to $11,950 looks to be a tough task to achieve and $10,455 may be more realistic.

The ascending, bullish 5-day moving average (MA) and 10-day MA also favor further upside in prices. Meanwhile, the RSI is stationed at 62 – well below 70 (overbought territory), leaving enough room for a rally to $10,400–$10,500.

And, last but not the least, BTC's bullish breakout yesterday was backed by a 35 percent rise in trading volumes, according to CoinMarketCap. A high volume breakout only validates the argument that the rally has legs.

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