Resurgent Bitcoin Will Likely Shrug off Long-Term Bear Cross

gepubliceerd op by Coindesk | gepubliceerd op

Bitcoin is better bid at press time and could maintain its recent upward trajectory despite a long-term bearish indicator making its first appearance in 19 months.

The top cryptocurrency rose to a two-month high of $8,580 during Tuesday's Asian trading hours and is currently trading at $8,480 indicating a 4.8 percent rise on a 24-hour basis, according to CoinDesk's Bitcoin Price Index.

Bitcoin is now up by more than 30 percent from the low of $6,425 reached in December 2019.While the cryptocurrency is showing signs of life following the gloomy second half of 2019, a widely-tracked technical indicator is about to flash a bearish signal.

The 50-candle average on the three-day chart is trending south and looks set to cross below the 100-candle average in the next few days.

While bitcoin did drop in the days leading up to and after the confirmation of the same bear cross in June 2018, the broader market conditions were bearish at the time, as seen below.

A subsequent rise ended up creating a bearish lower high at $8,500 and prices remained below the 50-candle MA till April 2019.It's worth noting that bitcoin had rallied by more than 1,300 percent in 2017 before falling by 50 percent in the first quarter of 2018.

Essentially, the market had a hard landing after the staggering annual gain, and the bear cross likely gave traders a reason to unwind their long positions.

Bitcoin has recently broken out of a six-month falling channel, signaling a resumption of the rally from lows near $4,100 seen in April 2019 and opening doors for a re-test of October highs above $10,000.

Further, the breakout comes four months ahead of the mining reward halving - a process that reduces the supply of bitcoin.

Historically, bitcoin tends to hit a new market cycle top in the calendar year of a halving, but before the event, according to popular analyst Rekt Capital.