Bitcoin (BTC) is showing signs of a potential breakout above the $70,000 mark as a key technical indicator has turned bullish, indicating a shift in momentum for the leading cryptocurrency.
The moving average convergence divergence (MACD) histogram, a widely-tracked momentum indicator, has recently switched to a positive stance on the weekly chart for the first time since April. This shift suggests a strengthening uptrend and hints at a bullish scenario for Bitcoin, which has been trading in a range between $50,000 and $70,000 in recent months.
Market experts attribute this positive development to several factors, including the Federal Reserve’s indication of potential rate cuts, the rising likelihood of a pro-crypto stance from Republican candidate Donald Trump in the upcoming U.S. election, and the weakening of the safe-haven Japanese yen. These factors are expected to propel Bitcoin towards the $100,000 milestone by the end of the year.
Understanding the MACD Indicator
The MACD is calculated by comparing Bitcoin’s average price over the past 26 weeks with the average over the past 12 weeks. The signal line, derived from a nine-week average of the MACD, is used to identify potential shifts in momentum. The histogram created by the difference between the MACD and signal lines serves as a visual representation of the indicator’s readings.
Historically, the MACD has proven to be a reliable tool for gauging trend strength and exhaustion points. In early September, its alignment with Bitcoin’s price movement hinted at a potential reversal from the downtrend, which has since materialized into a substantial price increase.
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Implications of the Bullish Signal
Following the recent MACD crossover, which aligns with a positive signal from the “line break chart,” Bitcoin’s upward momentum is gaining traction. With the price already surging by nearly 30% from its September lows, reaching a high of $69,500, the cryptocurrency appears poised to breach the $70,000 resistance level.
A historical parallel can be drawn with a similar MACD crossover that occurred in October last year when Bitcoin surpassed the $30,000 barrier, eventually reaching new all-time highs. This pattern suggests that the current bullish trend may lead to significant price appreciation, potentially surpassing previous records.
Overall, the market sentiment is optimistic, with indicators pointing towards a sustained bullish rally for Bitcoin in the coming months.
Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
Source: https://changelly.com/blog/bitcoin-on-the-verge-of-breaking-70k-barrier-with-new-bullish-signal/
