Bitcoin Price Eyes Chart Pattern That Kicked Off Bull Market in 2015


    • Bitcoin’s 50- and 100-candle moving averages on the three-day chart look set to produce a bullish crossover – a sign of bull market momentum. Back in October 2015, the same cross marked the start of a long-term bull market.
    • This time, BTC has already rallied more than 180 percent ahead of the bull cross. As a result, we may not see a big move to the higher side immediately following the confirmation of the bull cross.
    • Prices could rise to $8,400 in the next 24 hours, having witnessed a bearish channel breakout on Wednesday. A break below key 4-hour chart support at $7,910 would weaken the case for a rise to $8,400.

    A long-term bitcoin (BTC) price indicator is about to turn bullish for the first time in nearly four years.

    The 50-candle moving average (MA) on the three-day chart is trending north and could soon cross above the 100-candle, confirming a bullish crossover – the first since October 2015.

    A bullish crossover, as the same suggests, is a strong indicator of bull market momentum, according to technical analysis theory.

    In reality, however, both bullish and bearish crossovers tend to lag prices. After all, the MA studies are based on historical data.

    Even so, the upcoming bullish crossover warrants attention due to the fact that bitcoin broke into a 2.3-year long uptrend with the bullish crossover of the same averages in 2015.

    3-day chart (2015)

    BTC’s bear market ran out of steam at lows near $150 in January 2015, following which the price remained largely trapped in $200-$300 range for nine months before confirming a bearish-to-bullish trend change with a move above the July 12 high of $318 on Oct. 28.

    Notably, the 50- and 100-candle MAs had produced a bullish crossover on Oct. 16 – twelve days before BTC broke into a bull market.

    The cryptocurrency then charted a steady stream of bullish higher lows and higher highs over the next two years to reach a record high of $20,000 in December 2017.

    More importantly, lows near $220 seen ahead of the bull cross haven’t come into play till date.

    3-day chart (2019)

    The 50-candle MA could soon find acceptance above the 100-candle MA, confirming a bullish crossover.

    This time, however, BTC may not immediately see a sharp rally as the cryptocurrency has already gained more than 185 percent in the last six months.

    The relative strength index (RSI) has rolled over from overbought territory, signaling scope for a price pullback and is currently teasing a downside break of the trendline representing the uptrend from December lows. So, a temporary price pullback could be in the offing.

    It is worth noting that the picture was somewhat different in 2015 with BTC stuck in a $100 range for nine months to October during which the averages bottomed out.

    Further, the cryptocurrency was up just 67 percent from the bear market low and the RSI was reporting bullish conditions with an above 50-print when the crossover happened on Oct. 16, 2015. Put simply, BTC had room to rally on confirmation of the bullish crossover.

    As for the next 24 hours, BTC may remain bid, having ended an eight-day long trading range of $7,500-$8,100 with a bullish breakout on Wednesday.

    As of writing, the leading cryptocurrency by market capitalization is trading at $8,113 on Bitstamp, representing 1 percent gains on a 24-hour basis.

    4-hour chart

    BTC found acceptance above $8,100 in the U.S. trading hours yesterday, confirming twin bullish cues – a falling channel breakout and a sideways channel breakout on the 4-hour chart.

    As a result, the cryptocurrency has scope for a rally to $8,400. So far, however, the upside is being capped by the 100-candle MA, currently at $8,188.

    The case for a rise to $8,400 would weaken if the repeated rejection at the 100-candle MA ends up sending prices below the ascending trendline support, currently at $7,910.

    Disclosure: The author holds no cryptocurrency assets at the time of writing.

    Bitcoin image via CoinDesk archives; charts by Trading View

    Source link

    Stay in the Loop

    Get the daily email from CryptoNews that makes reading the news actually enjoyable. Join our mailing list to stay in the loop to stay informed, for free.

    Latest stories

    - Advertisement - spot_img

    You might also like...