By Jeff Clark – the editor of the Jeff Clark Trader
After several months of trending lower, Bitcoin looks ready to rally.
The King of the Cryptocurrencies lost about half of its value in the back half of 2019. It bottomed in December at about $6,600 per coin, and it has been stealthily moving higher ever since. And, the action this week sure looks bullish to me.
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Look at this chart of the NYSE Bitcoin Index ($NYXBT)…
The 50-day moving average (MA) – the squiggly blue line on the chart above – helps to define the intermediate-term trend of an asset. If an asset is trading above the line, then the trend is bullish. If the price of an asset is below the line, then the trend is bearish.
The price of bitcoin just popped back above its 50-day MA. That’s bullish.
More important, though, is the action in the shorter-term moving averages. The 9-day and 20-day exponential moving averages (EMAs) are on the verge of crossing above the 50-day MA. This sort of “bullish cross” often signals the start of an intermediate-term rally phase.
The last time the price of bitcoin popped above its 50-day MA, and the 9-day and 20-day EMAs completed a bullish cross, was back in February last year. That marked the start of a four-month-long rally. The price of bitcoin soared more than 200% during that time.
I don’t think we’ll see the same sort of move this time around. But, if the short-term EMAs can cross above the 50-day MA, then bitcoin is headed higher.
A move back up to last year’s high near $13,000 is possible. That would be a gain of more than 60% from Monday’s closing price.