This is When Bitcoin Will Rally
Bitcoin (BTC) world’s biggest cryptocurrency, started the new year stuck in a very narrow trading range shy below the considerable psychological number of $50,000 and near the critical 200-day simple moving average. The two key factors that can signal we’re bottoming out are:
1. A break above the 200-day moving average
2. RSI break above mid-level 50
Momentum Leads Price
One of the basic principles of trading is that momentum leads and price follows. In this regard, to escape the current bearishness, we need the RSI to cross above the mid-level 50 to signal positive momentum development.
In 2021, Bitcoin experienced three corrections (19 April, 8 September, and 16 November). In each case, the RSI crossed below the mid-level 50 right at the beginning of the sell-off. Similarly, each correction ended when the RSI crossed back above the 50 level.
200-Day Moving Average
The second signal to confirm the bottom is a daily break and close above the 200-day moving average. More importantly, we need the BTC price to trade for consecutive days closing above the 200-SMA. The 200-day simple moving average is widely regarded as the most influential moving average that delimitates an uptrend from a downtrend.
Moving forward: As long as the bearish momentum persists, the bears will face an important support zone in the $42,000 - $40,000 price range.
1. A break above the 200-day moving average
2. RSI break above mid-level 50
Momentum Leads Price
One of the basic principles of trading is that momentum leads and price follows. In this regard, to escape the current bearishness, we need the RSI to cross above the mid-level 50 to signal positive momentum development.
In 2021, Bitcoin experienced three corrections (19 April, 8 September, and 16 November). In each case, the RSI crossed below the mid-level 50 right at the beginning of the sell-off. Similarly, each correction ended when the RSI crossed back above the 50 level.
200-Day Moving Average
The second signal to confirm the bottom is a daily break and close above the 200-day moving average. More importantly, we need the BTC price to trade for consecutive days closing above the 200-SMA. The 200-day simple moving average is widely regarded as the most influential moving average that delimitates an uptrend from a downtrend.
Moving forward: As long as the bearish momentum persists, the bears will face an important support zone in the $42,000 - $40,000 price range.
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