The early-April resurgence in bitcoin ticked off another milestone on Tuesday when the digital currency closed above its 200-day moving average for the first time in more than a year.
The best-known cryptocurrency added nearly 20% on Tuesday, its best one-day return since December 2017. In mid-morning trade on Wednesday, a single bitcoin
fetched $5,022.35, up 4.3% on the day and up more than 50% from its December 2018 low near $3,200.
If this chart plays out, 2019 could go along way to repairing the damage done last year. It comes from Fundstrat Global Advisors, which calculated average returns of bitcoin over a six-month period when the cryptocurrency trades above or below the closely observed technical indicator.
“Based on BTC’s trading history, a move above the 200D for BTC is meaningful statistically. When BTC is above its 200D its win-ratio is 80% compared to a mere 36% when it is below its 200D,” the analysts wrote in a research note on Wednesday.
Moreover, if the analysis comes to fruition, bitcoin HODLers — those who hold their bitcoin through thick or thin — can expect triple-digit returns. “And 6M forward returns average 193% compared to a measly 10% when below its 200 [day moving average] — hence, being above the 200D is a big deal,” the analysts said.
So what does a 193% rally look like? At yesterday’s close, the 200-day moving average was set at $4,620, meaning a 193% rally would see the digital asset top $13,500, a level not seen since January 2018. A lofty target maybe, but one thing bitcoin now has on its side now is momentum. The cryptocurrency is on track to log its seventh consecutive winning week, and although April has just kicked off, a third consecutive winning month is on the cards.
But, as bitcoin aficionados have their sights set on levels seen in late 2017, one analyst noted the next hurdle bitcoin bulls face is just around the corner. “The next most obvious resistance level is $6k. I’m not sure we will get all the way there, but BTC will probably try,” wrote Jani Ziedins of the CrackedMarket blog.
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