Bitcoin’s Prices rose above the major averages for the first time in two months, showing that bullish momentum is gaining momentum.
The cryptocurrency’s price rose more than 3% in 24 hours to $73,700, above its 50-day moving average, which stood at $71,125 at the time of writing. Amidst the Iran war and global stock turmoil, especially in Asian markets, the price movement was strong after several days of solid performance.
The so-called 50-day moving average is one of the most widely tracked momentum indicators in the market, and analysts have recently cited it as one of the formidable resistance levels that could hold back any upside.
“This indicator often indicates medium-term trends, and a confident breakout of this indicator would mark an important turning point in the coming days,” Alex Kupczykevich, senior market analyst at FXPro, said in an email.
However, note that a bullish breakout does not necessarily guarantee a sustained uptrend. For example, the last session in early January saw prices rise 8%, but that momentum lasted only two weeks before sales resumed. Previous instances also gave mixed results.
For now, this breakout indicates continued upside and perhaps increased volatility as the price approaches the $75,000 mark. As CoinDesk pointed out on Friday, this is the level at which market makers (those who ensure a smooth trading experience by providing liquidity to exchanges) hold billions worth of net short gamma positions.
Therefore, as the price rises towards $75,000, we are likely to buy high to rebalance our net exposure to neutrality. This could lead to further market volatility.
