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Long-Term Bitcoin Price Indicator Turns Bearish, Suggesting Bottom May Be In

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A lagging indicator has became bearish for the primary time in 4 years, suggesting bitcoin’s worth can have bottomed out and {that a} new bull run may start this yr.

As of press time, bitcoin’s 50-week shifting moderate has dropped under the 100-week MA, confirming a bearish crossover – the primary since April 2015. Long-term bearish crossovers, then again, generally tend to happen on the finish of a giant endure transfer, with costs rallying quickly after, as MAs are in keeping with previous information.

For example, the 50-week MA responds to worth motion noticed over the past 12 months, and the 100-week MA tracks a lot older information. Therefore, the bearish pass of the 2 is the made of a protracted endure marketplace – BTC dropped from $20,000 to $3,122 within the 12 months finishing December 2018.

Put merely, it takes a perfect effort at the a part of the bears to push the 50-week MA under the 100-week MA. As a outcome, the endure marketplace is normally exhausted by the point the crossover is showed, which appears to be the case with BTC.

The main cryptocurrency by way of marketplace capitalization is recently buying and selling at $3,749, up greater than 19 p.c from the lows close to $3,100 noticed 11 weeks in the past. Further, bitcoin’s historic information presentations the former endure marketplace ended with the 50-week MA falling under the 100-week MA in April 2015. 

Weekly chart

As noticed above, the 50-week MA fell under the 100-week MA in April 2015 – 3 months after the endure marketplace stalled at lows close to $150. 

The cryptocurrency spent the next 5 months consolidating in a spread of $200-$300 sooner than breaking upper right into a recent bull marketplace in October 2015. Interestingly, all this took place a yr sooner than bitcoin underwent its 2d mining praise halving in July 2016.

With the 3rd praise halving due in lower than 12 months, historical past seems to be repeating itself.

The newest bearish crossover has took place just about 3 months after the sell-off from December 2017 highs ran out of steam close to $3,100.

The relative power index (RSI) has breached the falling trendline, caution the endure pass may entice dealers at the flawed aspect of the marketplace. Further, the cryptocurrency is now having a look north, having witnessed a high-volume bullish breakout ultimate week.

So, there’s a robust chance that BTC will start a brand new bull run later this yr by way of violating the bearish decrease highs development, as represented by way of the trendline sloping downwards from December 2017 highs.

Disclosure: The creator holds no cryptocurrency belongings on the time of writing.

Bitcoin symbol by way of Shutterstock; charts by way of Trading View

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