Bitcoin Price Hits 8-Month High Close to $7K
- Bitcoin printed an eight-month high of $6,964 earlier today. Further strengthening the long-term bullish bias is a bull cross of the 100- and 200-day moving averages (MAs) – the first since July 2015.
- A sustained move toward the next resistance at $7,411 (September 2018 high) could be preceded by a price pullback, as the 14-day relative strength index (RSI) is currently reporting overbought conditions.
- Pullbacks, if any, will likely be reversed by the historically strong 30-day moving average (MA), currently at $5,450.
- The long-term bullish outlook would be invalidated only below the 200-day MA at $4,405.
There seems to be no stopping the bitcoin (BTC) freight train.
The leading cryptocurrency by market value jumped to $6,964 at 06:00 UTC today on Bitstamp, the highest level since Sept. 5, 2018, having found acceptance above the crucial 200-week moving average at $6,500 in early Asian trading hours.
Prices have set a new multi-month high for the fourth straight day and have rallied in excess of over 70 percent in the last 5.5-weeks.
Notably, with the sharp rally, the 100-day MA of bitcoin’s price has moved above the 200-day MA. That is the first bullish crossover between the two averages since July 2015.
The development further confirms the long-term bearish-to-bullish trend change signaled by several technical indicators, including a golden crossover, over the last few weeks.
The moving average studies, however, are lagging indicators and have limited predictive abilities, as they take old price history into account.
Even so, investors may take heart as a similar crossover in July 2015 was followed by a 2.5-year bull run.
The 100-day MA has crossed the 200-day MA from below (see above left). The latest bullish crossover comes two weeks after the confirmation of a golden crossover of the 50- and 200-day MAs.
The last bull cross of the 100- and 200-day MAs (above right), confirmed on July 26, 2015, remained valid for 33 months, during which the price rallied 8,000 percent to a record high of $20,000.
With the next mining reward halving due in May 2020, the doors seem open for BTC rise further over the long-term.
The short-term outlook is also bullish. The 30-day MA is trending north with the price creating bullish higher highs and higher lows. BTC, therefore, looks set to extend the rally to the next resistance level at $7,400.
A pullback, however, may precede the next leg higher or the gains above $7,000 may not be sustainable in the short-term, as the 14-day relative strength index (RSI) is reporting extreme overbought conditions.
Also, it’s worth noting that BTC suffered a temporary price pullback from $290 to $220 in the four weeks following the bull cross in July 2015 before picking a strong bid.
That said, with the long-term technicals biased bullish, the historically strong support of the 30-day MA, currently at $5,463, could again reverse deeper price pullbacks, if any.
As of writing, BTC is changing hands at $6,800, representing a 7 percent gain on a 24-hour basis.
Disclosure: The author holds no cryptocurrency assets at the time of writing.