Back Above $4,000: Bitcoin Eyes Next Major Price Hurdle

Having successfully defended the key rising trend line support over the last few days, the bitcoin-US dollar (BTC/USD) exchange rate is well bid above the $4,000 mark today.

At press time, the cryptocurrency that powers the world's largest blockchain is trading at $4,070, up 3% on the day. On a monthly basis, though, it is still nursing 6% loss.

With the positive price action, investors appear to also be turning a blind eye toward news out of China that indicates at least one major domestic bitcoin exchange has followed through on apparent orders from regulators to stop yuan trading.

"All customers will be able to withdraw all their funds from our exchanges within 72 hours," BTCC said in a statement.

Elsewhere, speculation is gathering pace that a small group of miners and developers carry out a planned fork of the blockchain this month. The fork may lead to the creation of a new network called bitcoin gold, that would give new cryptocurrency to all bitcoin holders.

Still, investors are at ease despite the talk of another hard fork. So is bitcoin heading for the moon? The price action analysis does suggest bright times ahead for the cryptocurrency, although it still needs to clear the last technical hurdle.

Daily chart

With the spike above $4,000 adding credence to the bullish setup discussed in the previous update, the break above the 50-day moving average level of $4,123 would be a sort of the "icing on the cake."

Such a move would cement expectations of a rally to record highs (repeat of the July pattern). On the downside, only an end of the day close below $3,880 [today's low] would abort the bullish view.

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