On the morning of February 3, the price of Bitcoin (BTC) created a new peak for the last three months, while a major technical indicator also prepared to move to bullish for the first time in nearly 11 months.
Specifically, the world's No. 1 cryptocurrency soared to $ 9,615 on many exchanges this morning. This is the highest value of BTC since October 28, 2019.
This fluctuation came right after the Chinese stock market recorded a decline of up to 8% after the opening session of the week – the high probability continued due to corona virus and investors' concerns about the images. enjoy the health of the world's second largest economy.
Even so, the S&P 500 futures contract was up 0.65%, indicating that the buying force was still there, while the “hiding” assets like gold were declining at the time of writing. write – showing that it seems that corona virus is still not enough to make a negative impact on world stocks.
Notably, the rise above Bitcoin's $ 9,600 threshold was immediately followed by a sell-off to as low as $ 9,250. Despite such a strong adjustment, the growth prospect of BTC is still very solid as many technical analysis indicators now continue to favor the upward scenario.
The latest name to join the list is the bull cross of the 50-day and 100-day moving averages (MA), as can be seen below.
Daily graph of Bitcoin price
The 50-day MA line on the 2020 chart is now pointing up and is about to cross the 100-day MA line from the bottom up for another one to two days.
The last time this happened was in March 2019, helping the BTC price set a jump from $ 4,000 to $ 5,000 within a few hours to officially exit the 2018 bear market.
Risk of “bull trap”?
However, it should be noted that moving averages are lagging indicators (following the market price movement) and may trick investors into choosing the wrong position.
Looking back at history, the two bull crosss of the MA 50 and 100 days in June and August 2018, respectively, were unable to lift the buying force. At that time, the market was still deep in the sell-off from the peak of $ 20,000 in December 2017, continuously causing BTC to set a peak and a lower low.
However, with the current market situation much better, the above growth signals of the moving average will be a more reliable basis. Besides, many other indicators such as MACD and RSI on the weekly chart are still showing gaining signs, further strengthening the medium-term uptrend scenario of the price.
However, in the next 24 hours, the probability of Bitcoin falling to $ 9,000 is not small.
4-hour graph of Bitcoin price
The price of Bitcoin on the 4-hour chart since January 29 until now has largely hovered in a small range from $ 9,200 to $ 9,600.
If it can rally to $ 9,600 then the next target of the world's No. 1 cryptocurrency will be the critical psychological threshold of $ 10,000, while breaking through the $ 9,200 level, BTC will return to the $ 9,000 zone, or worse, the support threshold. The 200-day MA support is now at $ 8,874.
The relative strength indicator (RSI) of the 4-hour chart is plummeting sharply, indicating a higher possibility of price preparation. Supporting this scenario is the fact that the upper shadow of the candle today is very long, showing that selling pressure is gaining more advantage in the market than buying psychology.
However, this decline of BTC if it happens will not last long, because the longer-term technical indicators are still inclined to the growth scenario.
- The current bullish trend of Bitcoin price is still very solid, especially when preparing to have another positive signal is the first bull cross of the MA 50 and 100 days since March 2019.
- The world's No. 1 cryptocurrency in the coming weeks will likely rise to $ 10,000 again.
- However, before that rally, the market is likely about to be adjusted to $ 9,000 because of negative signals on the 4-hour chart.
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According to Coin68 / CoinDesk