Bitcoin Breaks Above 50-Day SMA, Will BTC Drive It Towards $50,000?

Bitcoin has broken above $44,000 again. After a few weeks of low momentum, bitcoin has been able to start a new recovery trend, adding more than $4,000 to its price in the past day. The landing point was above USD 43,000 and found its foundation at this level, taking it above the 50-day simple moving average. What does this mean for bitcoin?

Bitcoin Breaks Above 50-Day SMA

Bitcoin is now trading above the simple 50-day moving average. This point is important for digital assets as it represents what buyers are willing to pay for it in the short to medium term. When bitcoin is below this level, it shows a lack of enthusiasm among buyers and an unwillingness to pay the price previously paid in recent weeks.

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However, with BTC now trading above this level, it shows that investors are looking forward to getting back into the market. It takes the reins off the hands of the sellers and turns it into a buyers’ market. As buying pressure increases, more supply is being withdrawn from the market and the valuation of digital assets is skyrocketing.

This could also show that bitcoin has already marked a local bottom at $38,000. With this bottom confirmed, it shows a local support point for BTC where bulls have put up a lot of resistance.

BTC settles above $43K | Source: BTCUSD on TradingView.com

Alternatively, the digital asset is now also trading above the simple 5 and 20 day moving averages. This is incredibly bullish for the short term. The pressure has now shifted heavily towards buying, pumping the value of the digital asset in its wake. More so, BTC investors are increasingly choosing to hold rather than sell for profit, with miners leading the way in this regard.

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Even with the recent uptrend, bitcoin is not out of the woods yet. It broke through the first resistance point of $43,349 on Tuesday, but the next resistance point remains a hurdle. There is no doubt that bears will build resistance at the $45,044 level making this a significant milestone for the cryptocurrency. If bitcoin can breach this, the next resistance will be slightly above $48,000, after which nothing will stop the asset from breaking above $50,000.

One thing to note, however, is that the initial support level for bitcoin is well below this initial resistance point. If BTC fails to hold above $43,300, it could prove to be a short ride to $38,000 where the bulls have formed the strongest support. For a highly volatile asset like bitcoin, it could see it shave another $5,000 off its price just as easily if it had won it.

Featured image from South China Morning Post, chart from TradingView.com

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