- The short-term moving average on the Bitcoin daily chart is flattened.
- The phenomenon occurs after the cryptocurrency has reached its highest level since the sell-off in mid-March.
- Combined with favorable fundamentals such as halving, the MA points to a longer bull run towards or above $ 9,000.
A lagging technical indicator that determines Bitcoin’s short-term market bias has flattened in favor of bulls. And it could cause the cryptocurrency to test $ 9,000.
The 50-day moving average (saffron) identified a bullish reversal scenario for the first time since January 2020 when its curve crept sideways after weeks of downward momentum. The bounce-back phenomenon caused Bitcoin’s price to rise above USD 7,800, a 100% recovery from the low recorded on March 13.
The cryptocurrency closed above the 50 DMA wave during its upward trend and further strengthened its short-term bullish trend. The saffron curve can now serve as a support from where the price can bounce off to continue its price rally. However, a closing price below the 50-DMA marks the return of the bears.
This can be seen in the Bitcoin fractal from the beginning of this year. In the first week of January 2020, Bitcoin broke above the 50-DMA, whereupon the curve flattened. The move was the beginning of a new rally in which the Bitcoin price rose 43 percent on February 13, 2020.
Bitcoin is now repeating a similar scenario. First, the cryptocurrency is trading above the 50-DMA. Second, the curve is flattened. And third, the 20-day EMA (blued curve) is now trending above the 50-DMA – another bullish fractal from January to February 2020.
Other bullish indicators
While Bitcoin’s recent move above its key moving averages confirms a longer uptrend, what drives the global bullish narrative of cryptocurrency is halving mining premiums next month.
Bitcoin will undergo a daily supply rate cut on May 12, 2020. After that, miners can only produce 900 BTC a day, in contrast to 1,800 BTC currently. Bulls believe that halving would lead to a supply deficit in the Bitcoin market. And when the demand for cryptocurrency rises, so do prices.
“Bullish speculative demand for the upcoming halving is driving prices up and allowing us to maintain higher prices,” said Kevin Swenson, a popular crypto trader. “The selling pressure is very low. Buyers continue to show up. “
A $ 9,000 bitcoin in the second quarter
Major short-term bullish indicators have put the Bitcoin price at $ 9,000 in the second quarter, provided it can be above the 200-day moving average (blued). Well-known trader Teddy Cleps believes that 200-DMA is the only resistance that prevents Bitcoin from trying a bigger uptrend.
– Teddy (@TeddyCleps) April 28, 2020
The 20-50 MA crossover shows that Bitcoin would continue its upward trend. The purple rising wedge pattern also shows a similar upward path for cryptocurrency. So it seems that the BTCUSD pair could only hit or break the $ 9,000 mark in the second quarter.
However, the wedge also signals a deeper bearish correction as soon as the price peaks. That should bring Bitcoin back to retest the 50-DMA, which would mean an upward trend until then.
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