Bitcoins The price has risen above its key moving average for the first time in two months, signaling strengthened bullish momentum.
The cryptocurrency’s price is up over 3% to $73,700 in 24 hours, topping the 50-day moving average, which stood at $71,125 at the time of writing. The positive share action follows days of robust performance amid the Iran war and global equity turmoil, particularly in Asian markets.
The so-called 50-day moving average is one of the most widely tracked momentum indicators in the market, which analysts recently cited as one of the formidable resistance levels holding back gains.
“This indicator often signals the medium-term trend, and a safe break above it would be an important turning point in the coming days,” Alex Kuptsikevich, senior market analyst at FxPro, said in an email.
However, note that the bullish breakout does not necessarily promise a sustained uptrend. For example, the previous one at the beginning of January was followed by an 8% price increase, but the momentum lasted only two weeks before sales resumed. Previous cases have also produced mixed results.
So far, the breakout points to a continued move higher and perhaps increased volatility as prices move closer to the $75,000 mark. This is the level where market makers — those who ensure a smooth trading experience by providing liquidity on an exchange — have net short gamma positions worth billions, as CoinDesk noted on Friday.
So as prices rise towards $75,000, they are likely to buy high to rebalance their net exposure to neutral. This can increase market volatility.
