Bitcoin Follows Global Recovery of Financial Markets and Hits First Strong Resistance
Following the global recovery of the market, bitcoin and many digital assets have reached the first critical resistance point as the medium-term moving average is acting as the determining point of the trend.
At press time, bitcoin is trading directly at the above resistance line. Digital gold has reached the 50-day exponential moving average, which acts as a barrier between the asset trading in a downtrend and an uptrend. Whenever the asset crosses the resistance point, they continue their path.
According to the asset’s chart, the last time Bitcoin tested the above support was in early December 2021. The last test was not successful and resulted in the cryptocurrency falling below $50,000.
“Death” and “Golden Cross”
Previously, the indicator gave us one of the strongest signals for the current market – the cross of the 200 and 50-day moving averages which usually indicates a change in the long-term trend.
The most recent “death cross” occurred in the market on January 10 and resulted in bitcoin hitting a local low of $32,950. If Bitcoin pulls back and reaches the area above $50,000, a reversal of the indicator is expected.
The last test of the 50-day moving average in the event of a downtrend occurred in July 2021 and acted as a catalyst for bitcoin to reach a local high of $52,000. The last “golden cross”, on the other hand, happened close to the local top in August.
At press time, bitcoin was trading at $42,783 and has so far failed to break above the resistance due to the absence of strong buying volume in the market. According to historical data, each resistance break was followed by an increase of volatility.