Bitcoin prices were roaring back to life on Friday, at one point surging more than 12% on the day.
After enjoying a spectacular run, the cryptocurrency space has been wavering lately.
That has included intensifying pullbacks and increasing volatility. However, after such a big run, one can expect such a reaction - particularly in an asset like bitcoin.
Now though, it’s threatening to make another push up to its all-time high. Currently changing hands around $36,000 after a boost from Tesla's (TSLA) - Get Tesla Inc. Report Elon Musk, that high sits up at $42,000.
For bitcoin, it could get there in the next 48 hours and it wouldn’t be a surprise. While the cryptocurrency looks to be resolving to the upside, let’s take a closer look at the charts.
Above is a daily chart and below is a weekly look. Both charts look solid, to be honest.
On the daily chart, traders can clearly see the stock bouncing off the 50-day moving average and reclaiming the 10-day moving average on Thursday. On Friday, shares reclaimed the 21-day moving average and cleared downtrend resistance (blue line).
Now backing off today’s highs a bit, let’s see if bitcoin can hold its recent move. That is, holding above the 21-day moving average and downtrend resistance. To do so would bode well for bulls.
A look at the weekly chart shows consolidation after a big run, followed by a powerful move off the 10-week moving average.
Bitcoin hasn’t actually tagged the 10-week moving average since October. To do so now is a positive development.
On Friday, it temporarily gave us a weekly-up rotation over $37,936. However, it soon topped out and couldn’t hold this rotation point. As far as the weekly chart goes, this is a line in the sand.
If bitcoin can get above this mark and stay above it, then the bulls will likely have the momentum they need to send the crypto higher.
In that case, I have the $39,300 level on watch, which is the 361.8% extension. That’s followed by the highs near $42,000, then a push into the $43,000 to $45,300 area.
Above all those marks could put $49,000 to $50,000 in play.
On the downside, losing the 10-day moving average could put the 50-day moving average back in play.
Below the recent low at $28,800 and a larger decline could be in store. That would be a two-times weekly down rotation, if it were to happen next week. Below $27,734 would be a monthly-down rotation should it occur in February.