XBT/USD Analysis: Interest Builds As Bitcoin Spikes Towards $8,0

• Bitcoin breaks consolidation between $7,000 and $7,200 in favor of a breakout above $7,500.
  Technical levels are strongly positive even as the RSI ignores overbought conditions.
  

Bitcoin futures contract on BitMEX exchange closed the week in the positive following a drab start on Monday last week. The action in the last seven days has brought both tears and joy to the crypto scape where Bitcoin plunged to levels around $6,500 before recovering to highs close to $7,500.

The just-concluded weekend session contained the gains accrued last week by consolidating between $7,200 and $7,000. Assisting with the support was the 50 Exponential Moving Average (EMA). The breakout that ensued pushed above the resistance at $7,200 and $7,250. The momentum due to the breakout gave Bitcoin an additional boost above $7,500.

Bitcoin currently exchanges hands at $7,600 while sitting conformably above the EMA 200 support at $7,425. The gradually upward slopping Relative Strength Index (RSI) continues to ignore the overbought conditions. At the time of writing, the RSI is touching 80 after correcting from lower levels around 20.87.

The ongoing breakout targeting $8,000 is an extension of last week’s reversal above $7,000 after Bitcoin formed a double-bottom pattern. As long as the volume remains at its peak and the RSI sticks within the overbought region, gains above $8,000 would be possible. However, for now, the best move is to contain the gains above $7,500 and main the focus on $8,000. Others support levels include the EMA 200, EMA 50 $7,000, $6,800 and $6,500.

Bitcoin Key Technical Levels
BitMEX index price: $7,602

24-hour volume $2.3 billion

Open interest: $648 million

RSI: Ignores oversold conditions in support of bullish action.