Author: Omkar Godbole / Source: CoinDesk
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- Bitcoin’s three-day chart is showing a bullish crossover of the 5- and 10-day exponential moving averages for the first time since July. The crossover looks decisive as both EMAs are now trending north, validating the bearish-to-bullish trend change signaled by the high-volume triangle breakout seen on the 3-day chart.
- The cryptocurrency could test December highs above $4,200 in the near term.
- A minor pullback to $3,800 may be seen in the next 24 hours, as signs of bullish exhaustion have emerged on the hourly and 4-hour charts.
- The bullish case would weaken if BTC finds acceptance below $3,614 (the low of the previous three-day candle), but that currently looks unlikely.
A much-followed bitcoin (BTC) price indicator has turned bullish for the first time in seven months, indicating a trend change in the market.
On the three-day chart, the 5-candle exponential moving average (EMA) has crossed the 10-candle EMA from below – the first decisive bullish crossover since July 17, 2018.
Back then, BTC was trading above $7,300 and the crossover was followed by a rally to highs above $8,400 on July 24.
Moving average crossovers help identify shifts in momentum. A bearish-to-bullish trend change is confirmed when a short-term moving average crosses through a long-term average from below.
Many would argue that EMA crossovers are lagging indicators. While that is true, crossovers between the short duration averages help traders distinguish between bullish and bearish scenarios. The long-term MA crossovers like the “golden cross” (bullish crossover of the…