Bitcoin was failed to break above 200 day Moving average during its last rally from 6800$ to 9200$. But Finally Bulls managed to break above this key level. Bitcoin broke above 200MA when price breached through 9000$ during morning trading hours.
What is 200 Day Moving Average
According to Investopedia:
The 200-day SMA is particularly popular for application to daily charts. The 200-day SMA, which covers the previous 40 weeks of trading, is commonly used in stock trading to determine the general market trend. As long as a stock’s price remains above the 200 SMA on the daily time frame, the stock is generally considered to be in an overall uptrend. One frequently used alternative to the 200-day SMA is a 255-day moving average that represents the trading for the previous year.
As a very long-term moving average, the 200-day SMA is often used in conjunction with other, shorter-term moving averages to show not only the market trend but also to assess the strength of the trend as indicated by the separation between moving average lines. When moving average lines converge, this indicates a lack of definitive market momentum, whereas the increasing separation between shorter-term moving averages and longer-term moving averages, such as the 200-day SMA, indicates increasing trend strength and market momentum.
Technical analysis Daily chart:
We could see Bitcoin is moving in an uptrend channel, and the price is currently trading above 200 day moving average. Bitcoin can test the channel resistance at 9500-9700$ soon. We are expecting a rejection from 9500-9700$ Level, But also expecting Bitcoin to find support above 200MA for bullish continuation. MACD is also showing signs of another bullish crossover – which indicates bulls’ strength.
Good read – https://itsblockchain.com/bitcoin-chinese-new-year/
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