With another roadblock finally out of sight, Bitcoin’s price might just be headed for a breakout.
As of yesterday, September 25th, the Bitcoin/US Dollar exchange rate broke through its month-long downtrend, indicating the strong possibility of continued bullish momentum.
However, since then, Bitcoins price has remained relatively stable, causing great suspense as it continues to hover around its “make it or break it” point.
Fundamentally speaking, however, there is a factor to consider regarding the cause of Bitcoin’s current lethargic price movement:
In light of recent events, investors continue to remain on the sidelines as they seek clarity out of China on its regulatory stances regarding Bitcoin exchanges. However, speculation has been on the rise that the exchange “ban”, which occurred this month, was never officially formalized, and may just turn out to be a temporary pause of operations.
Nonetheless, the fact that Bitcoin’s price breached its month long downtrend clearly signifies the markets low regard for China’s regulatory stance on cryptocurrency. Slowly but surely, it seems that investors are beginning to veer toward a bullish outlook.
Technical Analysis:
As shown the by the chart above, Bitcoin’s correction in July caused its USD exchange rate to drop to $1935 where it met its 100-day SMA and experienced an immediate upward rally.
Just recently, Bitcoin followed a similar trend: its USD exchange rate plunged from $5000 on September 1st to a low of nearly $3000 on September 14th, causing it to bounce off the 100-day simple moving average and rally almost 30% in just a few hours.
The 100-day simple moving average is an arithmetic average gathered by adding together the closing price of the last 100 days and diving the sum by 100. This powerful indicator can act as a level of support when a price experiences a pullback.
Therefore, if Bitcoin can continue to find support around its current price level ($3896 at the time of writing), the odds of it repeating July’s upward momentum and hitting new highs will become much greater.
Note: A break of its Monday low of $3696 would clearly signal that its uptrend is no longer intact.
Conclusion:
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"Therefore, if Bitcoin can continue to find support around its current price level ($3896 at the time of writing), the odds of it repeating July’s upward momentum and hitting new highs will become much greater."
I am of the same opinion. Read my blog for my analysis.
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