Bitcoin Price Crosses 50-Day MA amid Seller’s Fatigue
Bitcoin is charting a bullish reversal after an impressive Friday rally pushed prices back above the 50-day moving average.
Bitcoin’s price clocked a high of $6,840.90 on Bitfinex Saturday, the highest in over two weeks. BTC was last seen trading at $6,678, having declined 1.2% from the previous session.
The leading digital currency shot up $400 on Friday after the U.S. Securities and Exchange Commission (SEC) announced it will delay a ruling on the highly touted VanEck SolidX Bitcoin Trust. The broader market was in a firm uptrend thanks to XRP’s triple-digit surge.
Bitcoin is now trading above the 50-day moving average, an important indicator for the bulls. Relative strength has weakened over the past 24 hours but remains in positive territory.
The bulls have a lot more work to do to ensure a stable recovery in the bitcoin price. Although BTC has successfully defended its key support, the market has been characterized by lower highs since mid-July.
At current values, bitcoin’s total market capitalization has risen to $115.2 billion. However, its share of the overall market has depreciated considerably. At the time of writing, bitcoin’s dominance rate was below 52%, according to CoinMarketCap. It recently peaked above 58%.
Michael Novogratz, the billionaire investor and founder of Galaxy Digital, believes bitcoin is due for a strong comeback as “seller fatigue” takes hold.
Speaking at the second annual “All Markets Summit” hosted by Yahoo Finance, Novogratz said crypto assets will be back on the upswing following the boom-and-bust cycle of the last two years. According to Galaxy Digital’s cryptocurrency index, the market has experienced a “classic bottom” that will make the top-ten coins more attractive in the foreseeable future.
“Bitcoin has held $6,000. Yes, it is off its highs, but it has established itself as a store of value,” Novogratz said, as quoted by Reuters.
The $6,000 price point has proven to be a formidable support zone for bitcoin as it is commonly cited as the break-even point for miners. The launch of bitcoin futures in December has also contributed to a sharp decline in volatility – albeit incremental – which appears to have set the price floor at or around $6,000. Although the market has breached this level on multiple occasions, each breakdown proved to be short-lived.
In terms of institutional adoption, Novogratz believes there are sizable sums of money currently waiting to be invested. This view conforms with the business strategy being employed by Coinbase, one of the world’s largest cryptocurrency exchanges, which has developed new custody services to attract institutional investors. Coinbase believes there is currently $10 billion in institutional capital sitting on the sidelines.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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