Bitcoin jumped 9% on Friday, helping the cryptocurrency to two key degrees of technical resistance much watched by traders.
On Friday, Bitcoin reached its 50-day and 200-day moving averages, which, if held decisively on Saturday, may indicate that Bitcoin is in a position to continue its long-term uptrend and point to its next resistance point near $52,900.
That’s according to technical analyst Katie Stockton of Fairlead Strategies, who argued in an earlier note this week that bitcoin’s long-term uptrend remains intact. This is despite the fact that short-term momentum has turned negative in recent weeks after Bitcoin fell below its widely followed moving averages.
“There’s a new countertrend signal from DeMARK signals that can save you from tracking, so feel more comfortable moving toward a short-term bullish bias once that signal is invalidated, which in our paintings would require 2x closes above $48,800,” Stockton said. Insider on Friday.
Moving averages are a lagging trend tracking indicator that technical analysts use to polish value movements and identify the direction of the existing trend.
Traders view the 50-day moving average, which is the average daily final value of an inventory during its last 50 trading sessions, as a short-term moving average that represents help or resistance spaces for a security.
On Friday, Bitcoin’s 50-day moving average stood at $46,621, while its 200-day moving average was $45,193, while the cryptocurrency was trading at $47,233 at the time of publication.
But if Bitcoin fails to keep Friday’s rise above its 50- and 200-day moving averages, Stockton sees close to $39,900 at stake, which would constitute a possible 15% drop from existing levels.