After experiencing a sharp decline from $19,700 last week, bitcoin (BTC) found support at its 200-day moving average (MA). This support helped the largest cryptocurrency by market cap to rally and surpass the previous resistance at $25,200.
After a month of volatility, bitcoin is currently trading at $26,300 in an uptrend. The 200-day moving average (MA) is providing a strong support level, suggesting that BTC could be set to scale new yearly highs and reach the $30,000 level. However, this rally could be coupled with high volatility.
early stages of a bull market
“JJ the Janitor,” an analyst on the Jarvis Lab team think over The $19,700 level is where bitcoin bottomed last week, as indicated by the 200-day MA, to be a key indicator to determine BTC’s current trend. He mentioned:
The fact that it was tested and held may confirm a thesis we’ve been sharing all year: this is the beginning phase of a new bull rally, not the latter phase of a bear rally.
The analyst believes that in the early stages of a bull market, prices will eventually reach a point where they become overvalued, triggering a chain reaction of liquidation of “long open interest”. This liquidation could be a cascade as BTC reaches the $30,000 level.
In a future liquidation cascade, the price could drop towards important support levels, such as the 200-day EMA, which will continue to rise as BTC price rises.
bitcoin natural state of high volatility
While bitcoin price is currently above the 200-week MA, for the analyst, this represents a short-term win as, as it holds this line, BTC has no “overhead” resistance for the first time since 2021. Will not done.
As seen in the chart above, Bitcoin’s volatility score, represented by the blue line, is breaking out of its 7-month range and recently touched its 200-day DMA (red line) at 26.13. has crossed. This suggests that BTC will soon break out of the $15,000-$25,000 range.
As depicted in the chart above, there was a significant increase in both volatility and price action from late 2020 to early 2021. During this period bitcoin broke the 200-day MA and surged from $15,500 to $58,000 in just four months. This shows the potential for BTC to generate significant upside momentum in the coming months. The analyst concluded:
Consider the volatility we experienced in early March foreshadowing what’s to come. We now find ourselves in a brave new world, a world for which BTC was uniquely designed.
This week, the cryptocurrency market has seen significant volatility. Although bitcoin has crossed the $26,000 mark, bears are hopeful of a return to previous lows, while bulls are optimistic as there is currently no major resistance above $26,000.
Bitcoin continues to post significant gains across all time frames. Currently trading at $26,300, BTC is up 5.9% in the last 24 hours and 30% in the last seven days.
Credit : www.newsbtc.com