Long Term Bitcoin Price Indicator Rises for First Time in a Year
Bitcoin (BTC) has moved back above $8,000 as a widely followed long-term indicator turns bullish for the first time in over a year.
The world’s largest cryptocurrency by market value is currently trading at $8,020 on Bitstamp – up more than $500 in the last 24 hours. Prices hit a high of $8,032 earlier today.
The 7 percent rise from the previous day’s low of $7,468 is noteworthy as the short-term technical charts had turned bearish earlier this week.
For instance, bitcoin dived out of a narrowing range on Wednesday, strengthening the case for pullback to $7,200 put forward by Monday’s “hanging man” candle.
The rise back to $8,000, therefore, could embolden buyers – more so, as the list of long-term technical indicators signaling a bull market continues to grow.
The latest to join the bandwagon is the 200-day moving average (MA) – a widely tracked barometer of long-term market trend.
The MA shed bearish bias (flattened out) in the first half of this month and is now beginning to curl upwards, further confirming a long-term bearish-to-bullish trend change signaled by several indicators over the last few weeks.
Bullish 200-day MA
As seen above, the 200-day MA has turned bullish for the first time since May 2018. As of writing, the average is located at $4,500.
Hence, short-term corrective pullbacks are not ruled out. Should prices move below that MA, the long-term bullish outlook would weaken.
As for the next 24 hours, BTC could rise to $8,300, according to a bull breakout seen on the short-term technical charts.
Hourly and 4-hour charts
BTC witnessed a bull flag breakout on the hourly chart (above left) earlier today – a continuation pattern that often accelerates the preceding bullish move. The cryptocurrency, therefore, has a scope for a rise to $8,400 (target as per the measured height method).
The hourly chart also shows an upside break of the falling channel (lower highs and lower lows).
The relative strength index (RSI) is now biased bullish above 50, having breached the descending trendline in favor of the bulls earlier this week.
Meanwhile, on the 4-hour chart (above right), the moving average convergence divergence (MACD) histogram has crossed over to bullish territory above zero and the RSI has violated the falling trendline in favor of the bulls.
With the odds stacked in favor of the bulls, BTC could challenge the recent high of $8,390 in the next day or two. A violation there would expose next major resistance at $8,500 (June 2018 high).
Even so, the bulls need to observe caution, as trading volumes have dropped over the last seven days as seen in the chart below.
Bitcoin’s rise from last Friday’s low of $6,178 is accompanied by lower highs on the volume bars.
That bearish divergence puts a question mark on the sustainability of recent gains and a further rise to $8,300, if any.
That said, the case for a fall back to $6,000 would strengthen only if the price closes below $7,206, confirming a double-top breakdown, as discussed yesterday.