Over the weekend bitcoin broke through the $8,000 resistance barrier and sits at around $8,700 on Coindesk at the time of writing.
As Omkar Godbole reports, “the widely tracked 200-day moving average beginning to curl upwards in favor of the bulls for the first time since May 2018.”
On 24th May Godbole wrote, “The world’s largest cryptocurrency by market value is currently trading at $8,020 on Bitstamp — up more than $500 in the last 24 hours. Prices hit a high of $8,032 earlier today.
The 7 percent rise from the previous day’s low of $7,468 is noteworthy as the short-term technical charts had turned bearish earlier this week.”
By 27th May, it had clearly surpassed this figure and Godbole believes the actions of the last few days will definitely encourage buyers. The strength of the 200-day moving average (MA), which is a widely tracked barometer of long-term market trend, is a good indication that BTC is now in a bull market. As Godbole says, “The MA shed bearish bias (flattened out) in the first half of this month and is now beginning to curl upwards, further confirming a long-term bearish-to-bullish trend change signaled by several indicators over the last few weeks.”
However, although the MA is something to watch, it is based on past data and tends to lag behind the current price. And, short-term corrective pullbacks should not be ruled out. For example, the MA average is $4,500; should prices move below that MA, the long-term bullish outlook would weaken.
But, according to today’s data, BTC has already broken through the next level of resistance, namely $8,500 seen in June 2018. Godbole still urges caution, because although the price has risen, trading volume has dropped off over the last seven days. He claims this “puts a question mark on the sustainability of recent gains and a further rise.”