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The important support zone could launch Bitcoin to new highs
Following a rapid price increase, Bitcoin, the first cryptocurrency, has broken through numerous important resistance levels, which made the majority of market participants feel euphoric and led to a shift in sentiment.
Reaching a potential support level
Due to the absence of buying pressure, Bitcoin has failed to break through the 100-day moving average, which stood at $45,800, and retraced to the $43,500 zone, testing its 50-day moving average.
The moving average with a 50-candle period usually acts as a major support level during an uptrend. The price tends to retrace when a rally cools off and then continues to move upwards when buyers start injecting more funds into the market.
The only problem with the current state of the market is the absence of a “golden cross” signal on the daily Bitcoin chart. A 50-day moving average usually acts as support after crossing a 200-day moving average. The “golden cross” is considered as an indication of a long-term trend change.
The last time Bitcoin experienced a “golden cross,” it rallied to the current all-time high of $68,000 that was reached back in November 2021.
What could be next for the first cryptocurrency?
There are two possible scenarios for the first cryptocurrency at this point: a complete reversal of the rally or a potential spike up from the current support. The rally could come to an end in case the cryptocurrency drops below short-term moving averages that are currently moving between $42,000 and $41,0000.
At press time, Bitcoin is trading at $43,746 as it continues to trade sideways.