Bitcoin has released bullish signals, which favor a progressive price trend towards the 200-day SMA (simple moving average), according to Katie Stockton, the founder and managing partner of Fairlead Strategies.
The daily charts for Bitcoin indicate that Bitcoin (BTC) shot from USD 38,500 to USD 42,000 in the last three days to Thursday. This means the price is defending the Ichimoku cloud support.
Ichimoku, a technical indicator comprising two lines, a leading span A and span B, was developed in the 1960s by Goichi Hosoda. Both spans are drawn 26 days ahead of the last candle. This indicator is mainly used for identifying the levels of support and resistance, with crossovers below or above showing advanced signs of bullish breakouts.
The latest bullish run is supported by positive signals by technical tools, such as MACD (moving average convergence/divergence) and stochastic histograms.
Stockton said that Bitcoin held an important support close to USD 40,000, resulting in an oversold “buy” signal following a 3-day rally on stochastics. This supports the short-term bullish bias. Checking on the daily MACD, it is also pinched, showing improved momentum in the short-term enroute the next resistance, USD 48,100, as defined by the 200-day moving average.
BTC 3-Day Rise Puts the 200-day SMA of USD 48,000 into Focus
From technical analysis, stochastics oscillate between 0 and 100, helping the trader to note overbought and oversold conditions. Therefore, traders are able to note the best points to enter or exit trades. If an asset drops below 20, it is considered oversold, while anything above 80 means overbought. A turn from below 20 is considered a good buy signal.
MACD histogram is used for identifying trend changes and strength. Positive/negative flips show bullish/bearish trend shifts. When declining bars (pinch), commonly referred to as lower highs, are noted above the zero line, or higher lows below the zero line, they show a bullish or bearish trend approaching the exhaustion points.
For Bitcoin, the three-day rise returned the 200-day SMA of USD 48,000 into focus. Late last month, BTC found the average a big challenge, holding the recovery around the USD 37,500 level.
Recently, BTC has been trading near the USD 42,300 mark, which represents a slight gain of 2%, according to the data gathered from Coindesk.
