Analysis

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  • Bitcoin’s 50-day moving price average could soon move above the 100-day moving average, confirming its first bullish crossover in seven months.
  • While the bullish crossover is a lagging indicator, the current slope of the MAs is signaling bearish exhaustion. So, bitcoin could rise toward $4,236 (Dec. 24 high) in the near future, as suggested by other longer duration indicators and the bullish candle created on Feb. 27.
  • The bullish case would weaken if prices find acceptance below $3,658 (Feb. 27 low).

A widely-followed bitcoin (BTC) price indicator is about to turn bullish for the first time in seven months.

Bitcoin’s 50-day moving average (MA) – currently located at $3,669, according to Bitstamp data – could soon move above the 100-day MA at $3,670. The event would confirm the average’s first bullish crossover since the end of August 2018.

However, the bull cross is a lagging indicator, being based on past data, and in this instance is likely more a product of bitcoin’s recovery rally from lows near $3,100 seen in December.

That said, with several key indicators, like the weekly moving average convergence divergence (MACD) and the money flow index flashing early signs of bullish reversal, the probability of the cross trapping the bulls on the wrong side of the market seems low.

As of writing, BTC is changing hands at $3,860, having clocked a low of $3,791 earlier today.

Daily chart

As seen above, the 50-day MA is about to cross the 100-day MA from below.

Notably, the former is beginning to curl upwards in favor of the bulls, while the latter is now flat-lined, as opposed to the bearish slope seen two weeks ago.

Further, BTC’s repeated defense of the 100-day MA seen over the last 12 days has strengthened the bullish case put forward by the long-tailed doji candle created on Feb. 27.

BTC could rise toward the inverse head-and-shoulders neckline resistance, currently located just below the bearish lower high of $4,236 made on Dec. 24.

A UTC close higher would confirm a bearish-to-bullish trend change and could yield a rally to $5,000.

Weekly chart

On the weekly chart, the 5- and 10-candle MAs produced a bullish crossover two weeks ago. Further, BTC defended the 10-candle MA in the previous two weeks, reinforcing the bullish reversal signaled by the MA studies.

So, BTC is more likely to challenge the recent high of $4,190 in the near-term.

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

Bitcoin image via Shutterstock; charts by Trading View

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