Bitcoin The price has broken above its key average for the first time in two months, indicating strengthening bullish momentum.
The price of the cryptocurrency has gained more than 3% to $73,700 in 24 hours, surpassing the 50-day moving average, which stood at $71,125 at the time of writing. The positive price momentum comes after days of resilient performance amid the Iran war and global stock turmoil, especially in Asian markets.
The so-called 50-day moving average is one of the most followed momentum indicators in the market, which analysts recently cited as one of the formidable resistance levels holding back gains.
“This indicator often signals the medium-term trend, and a safe break above it would be an important turning point in the coming days,” Alex Kuptsikevich, senior market analyst at FxPro, said in an email.
However, keep in mind that the bullish breakout does not necessarily promise a sustained uptrend. For example, the previous one in early January was followed by an 8% price increase, but the boost lasted only two weeks before sales resumed. Previous cases have also yielded mixed results.
For now, the breakout points to a continued move higher and perhaps increased volatility as prices approach the $75,000 mark. This is the level at which market makers (those who ensure a smooth trading experience by providing liquidity on an exchange) hold net short gamma positions worth billions, as CoinDesk noted on Friday.
Therefore, as prices rise towards $75,000, they are likely to buy high to rebalance their net exposure to neutral. This could increase market volatility.
