Bitcoin has broken above $44,000 once again. After a couple of weeks of low momentum, bitcoin has been able to begin another recovery trend that has seen it add over $4,000 to its price in the last day. Its landing point has been above $43,000, finding its footing at this level, which has put it above the 50-day simple moving average. What does this mean for bitcoin?
Bitcoin Breaks Above 50-Day SMA
Bitcoin is now trading above the 50-Day simple moving average. This point is significant to the digital asset given that it represents what buyers are willing to pay for it in the short to medium term. When bitcoin sits below this level, it shows a lack of enthusiasm among buyers and an unwillingness to pay the price paid previously over the last couple of weeks.
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However, with BTC now trading above this level, it shows that investors are looking to get back in the market. It takes the reins out of the hands of the sellers and makes it a buyer’s market. With buy pressure growing, more supply is taken off the market and the valuation of the digital asset shoots up.
This could also show that bitcoin has already marked a local bottom at $38,000. With this bottom confirmed, it shows a local support point for BTC where bulls have put up much resistance.
BTC settles above $43K | Source: BTCUSD on TradingView.com
Alternatively, the digital asset is now also trading above the 5 and 20-day simple moving averages. This is incredibly bullish for the short term. Pressures have now greatly skewed into buy, pumping the value of the digital asset in its wake. More than that, BTC investors are choosing more and more to hold instead of sell for profits, with miners leading the charge in this regard.
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Even with the recent uptrend, bitcoin is not out of the woods yet though. It has broken the first resistance point of $43,349 on Tuesday but the next resistance point remains a hurdle. There is no doubt that bears will mount resistance at the $45,044 level, which makes this an important milestone for the cryptocurrency. If bitcoin can break through this, the next resistance sits a little above $48,000, after which there is nothing holding the asset back from break-in above $50,000.
One thing to note though is that the first support level for bitcoin sits far below this first resistance point. If BTC fails to hold above $43,300, then it could prove to be a short ride down to $38,000 once more, where the bulls have formed the strongest support. For a highly volatile asset like bitcoin, it could see another $5,000 shaved off its price as easily as it had gained it.
Featured image from South China Morning Post, chart from TradingView.com