over 2 years ago • 1 min
After breaking through a key technical level, bitcoin is looking to make a decisive move higher following two months in the doldrums.
The cryptocurrency finally managed to close above its 50-day moving average (shown in pink on the chart) on Sunday and was flirting with the 100-day average (in green) as of 8am on Wednesday in London. If bitcoin manages to close above the 100-day average, it would put the 200-day average at $44,602 (in orange) firmly in view.
Crypto bulls have suffered recently as bitcoin first tumbled more than 50% from its all-time high in April then struggled to break out of a trading range between $30,000 and $40,000 (shaded in yellow). As the top of that range coincides with the 100-day moving average, where bitcoin goes from here could well define its immediate future.
Because bitcoin has so few fundamental underpinnings, many traders follow technical signals like moving averages even more closely than in other markets. If the OG cryptocurrency can decisively break above $40,000 and the 100-day moving average at $40,394 it’ll send a clear bullish signal. But a drop back into the $30ks would reinforce the idea of $40,000 as a ceiling.
Technical analysis argues that you can infer where a price might go next based on its past movements. It’s more art than science – and two different technical analysts can look at the same chart and come away with opposite conclusions. But patterns like a break above a closely followed moving average are almost universally considered bullish.
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