Off the Leash? Bitcoin Looks North After Breaking $16K

Bitcoin is gaining altitude today, amid a sharp drop in prices of some alternative currencies.

Prices on CoinDesk's Bitcoin Price Index jumped 7 percent to an intraday high of $16,181 in the last two hours. The cryptocurrency has appreciated by 10 percent in the last 24 hours, according to data source CoinMarketCap.

Meanwhile, Ripple's XRP token has depreciated by 9 percent in the last 24 hours, having soared to new heights on Jan. 3.

Other alternative currencies like XEM$0.0₃5466, ADA$0.2351 and Stellar (STR) are down at least 12 percent each. More importantly, the XRP/BTC (ripple-bitcoin) pair has taken a beating in the last couple of hours. XEM/BTC, ADA/BTChttps://www.binance.com/trade.html?symbol=ADA_BTC, ETH/BTC (ethereum-bitcoin) and LTC/BTC (litecoin-bitcoin) are also losing altitude.

So, bitcoin BTC$73,408.04 seems to have caught a bid wave at $14,848.10 (07:29 UTC), tracking the weakness in the cross cryptocurrency pairs (ETH/BTC, LTC/BTC, XRP/BTC) – that is, money made from the altcoin rally is likely being channeled back into BTC.

Price chart analysis also suggests BTC could extend the rally to $18,000-$18,600 in the short-run.

4-hour chart

The above chart (prices as per Coinbase) shows:

• An inverse head and shoulder breakout. As of writing, BTC is trading well above the neckline hurdle of $15,550, so the bullish breakout is pretty much a done deal. Prices could rise to $18,600 (target as per the measured height method) over the weekend.
• Other factors – including a breach of the falling trendline, a bullish break of the falling wedge, higher lows as represented by the rising trendline – also favor further upside in BTC.
• The relative strength index (RSI) is above 50.00 (in the bullish territory) and rising, indicating scope for a rally in prices.

View

• BTC could cut through resistance at $16,490 and move towards $18,000–18,600 mark over the weekend.
• Bearish scenario: A failure to hold above the neckline support (former resistance) of $15,500 followed by a break below $14,230 today would open the doors for a drop to sub-$12,500 levels.

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