Bitcoin is showing signs of renewed strength after reclaiming a key technical level that historically marks the start of short-term rallies.
Bitcoin, the pioneering cryptocurrency, has recently demonstrated a notable recovery, positioning itself back above its 50-day exponential moving average (EMA). This crucial technical level, often used by traders to gauge market momentum, has historically signaled potential upward movements. According to an analysis by CryptoQuant contributor İbrahim COŞAR dated June 25, the movement suggests that Bitcoin may be setting the stage for a rally.
Historical patterns reveal that when Bitcoin’s price dips below the 50-day EMA and subsequently rebounds, it tends to generate substantial gains, ranging between 10% to 20%. Currently, Bitcoin has successfully closed above this moving average for three consecutive days after a brief dip, an encouraging sign for bulls who appear to be regaining control of the market.
COŞAR expresses optimism regarding Bitcoin’s trajectory, alluding to a bullish target of $120,000 in the near future. However, he also warns of potential volatility stemming from geopolitical tensions involving the United States, Israel, and Iran. Such developments could introduce unexpected fluctuations into the market, emphasizing the importance of remaining vigilant amidst bullish indications.
As of now, Bitcoin is trading at approximately $106,720, reflecting a 1.4% increase within a 24-hour timeframe. This rebound marks an impressive recovery from a low of $98,974 observed on June 22, when escalating tensions in the Middle East prompted a market sell-off.
Interestingly, some analysts posit that geopolitical instability could, in fact, bolster Bitcoin’s stature as a reliable hedge. Historical contexts show that wars and inflation drive government spending and may lead to easier monetary policy. Such environments generally favor alternative assets like Bitcoin, which often thrive in times of economic uncertainty.
Despite the ongoing conflicts, investor interest in Bitcoin remains strong. Data from SoSoValue highlights consistent inflows into spot Bitcoin exchange-traded funds (ETFs), with net inflows totaling an impressive $938 million over the past week alone. This sustained interest underscores the robust demand among investors seeking to capitalize on Bitcoin’s potential.
From a technical analysis standpoint, Bitcoin has breached the 50-day EMA and is now approaching the upper resistance band around $110,100. Observing how Bitcoin consolidates within the $105,700 to $106,000 range will be critical in determining the strength of the bullish momentum. A successful accumulation in this zone could affirm a continuation of the upward trend.
The relative strength index (RSI) currently sits at 54.69, indicating a state of improving momentum without entering overbought territory. Additionally, shorter-term moving averages are signaling “buy” opportunities, while the moving average convergence divergence (MACD) indicator has entered the bullish signal zone, further strengthening the case for a potential rally.
However, for the bullish momentum to persist, Bitcoin must overcome key resistance levels between $108,000 and $110,000. A daily close above the $110,000 mark could unlock further upside potential, paving the way for a move towards the $114,000 to $120,000 region. Conversely, should momentum wane, significant support levels exist at $105,000 and stronger buying interest could resurface around $102,000 or even $98,900.
