2.5 Signals that Indicates a Big Price Move has come for Bitcoin
The crypto market is back in action with Bitcoin’s rush to nearly 5-month highs earlier this April. The leading cryptocurrency jumped nearly $1,000 to $5,080 in a 60-minute window on 2nd April, indicating a transition in the crypto market trend. At the time of writing this, Bitcoin was trading in the range of $7800 to $8300, a new 2019 high.
In this blog, we will be looking at some of the signals that indicate that the year-long bear market for Bitcoin has finally come to an end.
1. Statistical data is supporting a bullish move
For a long time, Bitcoin’s charts are giving signs that an upward trend might be in the market.
It first started in late February, when Coindesk reported that “the 50-week moving average of Bitcoin dropped below its 100-week moving average, signaling a bearish crossover.” This was the first sign of a bullish trend since April 2015.
However, it was just the beginning, many longer duration indicators, like the moving average convergence divergence (MACD) and the weekly money flow index (MFI), added evidence to the trend. On March 4, the MFI of Bitcoin bottomed, denying the lower low in the Bitcoin’s price.
A bullish divergence is usually considered as an early indicator of a bearish-to-bullish trend. A rising MFI usually signifies an increase in buying pressure, while a falling MFI signals an increase in selling pressures.
Even, the MACD, which is calculated by subtracting the longer-term moving average from the shorter-term moving average, also turned bullish this year.
2. The halving of mining rewards in Bitcoin
The data mentioned above is likely to reinforce expectations of a stronger rally ahead of the incoming halving, a pre-planned, programmatic reduction in the amount of new Bitcoin paid to miners.
Bitcoin is scheduled to undergo a mining reward halving in the year 2020. From the historical data, one can assume that the process usually means that a bullish market is about to come. In December 2018, markets first took note of this when the sell-off ran out of steam near $3,100.
The current price pattern is similar to how the previous bear market had ended in early January 2015, at lows near $150. This was 17 months before a reward halving in August 2016.
The above data is an indicator that BTC might be repeating history by breaking into a bull market at least a year before the next mining reward halving which is due in August 2020.
Another big reason which can be considered as a signal that a bull market is set to come is ‘Market activity.’
On April 2, a report by Reuters showed that “Bitcoin jumps 20 percent, breaking the $5000 bar for the first time since November” This was triggered due to an order worth of $100 million spread across several major exchanges — Kraken, Coinbase, and Bitstamp.
Conclusion
Bitcoin has been struggling a lot to break its $5000 bar since last year. Now that it has, the next question is, will this be enough for a trend change? The signals mentioned above are showing that the time for Bitcoin bull market has finally come.
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