Bitcoin hits three-month high of $49,704

The next test for the world's largest cryptocurrency is the key $50,000 resistance level

Bitcoin hit its highest level since May to trade at $49,704 on Saturday. Getty

Bitcoin is approaching the key $50,000 level as it continues to rise out of a multi-month period of weakness.

The largest cryptocurrency traded at $49,704, the highest since May 16, on Saturday in New York.

Its rally is overcoming a rare confluence of technical obstacles, including an April low of about $47,000 and a Fibonacci and Ichimoku cluster between $47,000 and $48,000.

The 61.8 per cent Fibonacci retracement of the April to June downtrend – at $51,000 – still looms as a potential obstacle, along with the round-number mark of $50,000.

“The next major resistance, for now, is at the $50,000 zone,” said Konstantin Anissimov, executive director at CEX.IO crypto exchange.

“The recent price rally is not indicative of a massive jump yet. However, should more buyers dive in to push the price above the $50,000 level, a frenzy may be ushered in to steer the price towards a medium-term target of $55,000.”

Bitcoin has recovered after trading in a range of about $30,000 to $40,000 for many weeks, after it plunged from a record near $65,000 in mid-April.

Still, it is up significantly over the past year amid institutional adoption and endorsements from big names such as Paul Tudor Jones and Stan Druckenmiller. Global cryptocurrency adoption is up by about 881 per cent over the past 12 months, according to Chainalysis.