BTC surpassed $ 49,000 tonight for the first time since mid-May. As a result, the return on investment in bitcoin since the beginning of the year is again 66%, after dropping to zero in July.
Bitcoin is moving in an uptrend. The cryptocurrency broke the 200-day moving average (MA) yesterday. If the dynamics continue, we will soon see BTC at $ 51,000.
«The institutional world is starting to be wary of the stock market, which makes cryptocurrencies more attractive,» Oanda analyst Edward Moya said, admitting that if the bullish momentum continues, the cryptocurrency could rise to $ 52,500 by the end of next week.
Bitcoin is recovering
Bitcoin formed the Doji Tombstone candlestick pattern on August 18. Since then, the cryptocurrency has appreciated by almost 7% to $ 48,800. BTC continued to move on an upward trajectory on August 20. The price is trying to break the previous peak of August 14 at 48,150. As a result of yesterday’s gains, BTC broke the 200-day moving average. The coin has been circling this level for the past two weeks.
Moreover, BTC bounced off the $ 44,000 short-term support area. Bitcoin is currently above the $ 45,973 weekly pivot point. As long as it remains above that level, short-term sentiment should be viewed as bullish.
The first support area is at $ 42,600. In case of a breakout, the next important area will be around $ 37,300. Here on the daily timeframe, the price formed an upward low.
Moreover, a drop in trading volume indicates a decrease in volatility. In addition, the BBWP indicator is declining and has already gone under the 50 mark. This situation may lead to a sharp movement – up or down – in the last days of August.
Technical indicators turned in bullish direction. RSI has returned from neutral territory and is moving up. MACD, having formed several small bars with negative dynamics, is close to the recovery of the bullish dynamics. Stochastic has formed a bullish cross and returned to bullish territory.
The ascending channel border is at $ 51,000
An ascending parallel channel is forming on the 4-hour chart. It originates from the July 20 lows. Yesterday BTC bounced off the lower border of this channel and turned up. The nearest target is the median of the channel in the area of $ 51,000.
The $ 51,000 level coincides with the 0.618 Fibonacci retracement of the entire downtrend, as well as weekly resistance R3. Thus, it forms an important area of resistance where selling pressure can be expected to increase.