It’s been quite the rebound in the crypto world lately. Bitcoin prices were up about 4% on Monday to $45,500, hitting its highest level since mid-May.
The recent push has Bitcoin set for its first possible close above its 200-day moving average in several months.
From the recent low last month, the leading cryptocurrency by size is up almost 60%.
Ethereum has also been trading better as we outlined last week. That strength is continuing this week too as Ether is now trading north of $3,000.
Ever since “The B World” conference, Bitcoin and other cryptocurrencies have had strong upside momentum. That conference included Tesla’s (TSLA) - Get Tesla Inc Report Elon Musk, ARK’s Cathie Wood and Twitter (TWTR) - Get Twitter, Inc. Report and Square’s (SQ) - Get Square, Inc. Class A Report Jack Dorsey.
It’s also got the so-called “crypto equities” flying higher. That includes Marathon Digital (MARA) - Get MARATHON DIGITAL HOLDINGS INC Report, Microstrategy (MSTR) - Get MicroStrategy Incorporated Class A Report, Riot Blockchain (RIOT) - Get Riot Blockchain Inc Report and others.
The charts looked like crap a month ago. Bitcoin was continuing to put in a series of lower highs, while support near $30,000 continued to hold.
However, this setup - known as a descending triangle - is bearish in nature and generally results in a break below support. That’s as each test of support has less and less power for the rallies, as noted by the lower highs.
After The B Word conference though, Bitcoin ripped off eight straight daily gains. It’s also working on its fourth straight weekly gain.
Bitcoin struggled with the $40,000 area, but found support from its 10-day moving average before pushing up to the 200-day moving average and $45,000 level. However, the move has investors asking the simple question of, what now?
On the upside, let’s see if we can get a small but continued push higher. Above $45,000 puts the $47,100 area in play, which was the breakdown area in May.
If Bitcoin can clear $47,100, it puts the $50,000 to $51,000 zone in play. Not only is this a key psychological level for the asset, but it’s also about where the 61.8% retracement for the current range comes into play.
Above that area and we can start talking about a push back up to Bitcoin's major resistance area near $60,000, but let’s go one step at a time and not get ahead of ourselves.
On the downside, I want to see the $42,000 area and the 10-day moving average continue to hold as support.
Should they fail, it may put $40,000 and the 21-day moving average on the table, followed by the 50-day moving average.
At least for now, it looks like the low for the year is in and bulls can start to look for new uptrends to trade and dips to buy.