Bitcoin Receives another Positive Indicator as its Price Approaches $70,000
A well-known momentum indicator has recently turned bullish for the first time since April, indicating a potential upward movement in Bitcoin’s price. This indicator has previously provided reliable signals at the start of major rallies in late 2023 and late 2022, signifying the end of significant downtrends.
The moving average convergence divergence (MACD) histogram, a technical analysis tool used to assess trend strength, has turned positive on the weekly chart. This development suggests a renewed upward momentum for Bitcoin, potentially leading to a break above the $70,000 level. This positive signal aligns with the prevailing consensus that factors such as the Federal Reserve’s inclination towards rate cuts, a higher likelihood of a cryptocurrency-friendly Republican candidate winning the U.S. election, and the weakening of the anti-risk Japanese yen may drive Bitcoin to $100,000 by the end of December.
The MACD is calculated by subtracting the average price of Bitcoin over the past 26 weeks from the average over the past 12 weeks. The resulting signal line, a nine-week average of the MACD, is then used to plot the histogram, representing the difference between the MACD and the signal line.
Bitcoin has experienced a significant rally, rising by nearly 30% since its lows below $53,000 in early September. During Asian trading hours on Monday, the leading cryptocurrency reached a price of $69,500. The recent bullish signal from the MACD, combined with a similar indication from the “line break chart” last week, suggests that the $70,000 mark may finally be breached, after multiple failed attempts earlier in the year.
In previous instances, when the MACD showed a bullish crossover, Bitcoin’s price surpassed the long-standing resistance levels of $30,000 and $50,000, eventually reaching a record high of over $73,000 in March this year. The bullish crossover observed in late 2022 also marked the bottom of the bear market.
Overall, the current bullish signals from the MACD and other technical indicators provide further optimism for Bitcoin investors and indicate the potential for continued upward momentum in the cryptocurrency’s price.