After much speculation and even more sidewards trading, it seems clear now which direction BTC has decided to go. The world’s most popular cryptocurrency has blown past several areas of resistance over the past day and you wouldn’t be wrong to ask yourself whether this is bitcoin’s time to shine. Prices have flirted with the $6900-$7200 range for more than a month now, but several factors have now come together to push BTC to new highs. At the time of press, bitcoin is trading over $7550 but reached highs of $7775 earlier today before leveling off again. The significant jump in bitcoin price that we saw today (approximately 8%) occurred over the course of about an hour.
Investor Confidence Driving Price Action
Were these gains a fluke? Not according to the experts. In fact, most are pointing to several different reasons for bitcoin’s sudden jump in price. One factor that should be considered is increased investor interest leading up to the halving event which is set to take place in just over 18 days. Increased trading volume indicates more investors looking to align themselves with the best possible positions before BTC becomes more expensive.
Bitcoin prices moving well above the 50-day MA also triggered a lot of investor action. From a technical standpoint, a price move above the 50DMA usually signals opportunity. Aggressive investor response that indicator helped usher in new monthly highs for BTC.
The 50-day MA isn’t the only technical indicator pointed to a bullish case. A look at the ichimoku cloud shows that the expected future of BTC looks very bullish. That said, there will likely be some price testing atop the ichimoku cloud as a support before bitcoin continues its ascent. The most critical support zone at the moment appears to sit between $7300 and $7400. As long as prices remain within and above that area of support, the bullish case for bitcoin may very well remain.
To truly confirm a bullish case, however, prices will have to move past some key areas of resistance. One being the 150-day MA currently sitting at nearly $7800. We touched on that level today but prices quickly reverted to the mid-$7550s where they have since remained. Passing that important resistance level would open new opportunities for a correction all the way back to pre-March 12th prices.
Previous Support and Resistance
Before the major dip in value that came on March 12th, some of the most crucial levels of support and resistance were well established at the $8000, $9000, and $10000 marks. It is still too early to see if BTC has $10000+ in its crosshairs but many experts in the crypto industry are calling the case for such a rise very likely. For now, we must keep an eye on each of the major targets, one at a time.
Consider the Alternative
Despite recent sentiment supporting a bullish case for bitcoin, it is wise to consider the other side of the coin as well. During its retest, there is a possibility that the support of $7190 could be broken if that retest proved to be strong enough. Any sustained time under that price could easily turn that support into resistance once again, essentially negating the 8% gains we saw today. That said, the last time we saw gains of this size was on April 16th and there was no immediate correction, just a lot of sideways trading for more than a week.