Bitcoin’s ($BTC) price moving over its 50-day moving average earlier this month suggests that the flagship cryptocurrency has broken its downtrend and is entering another rally, according to a research firm.
As first reported by Business Insider, the Bespoke Investment Group has said in a note that the flagship cryptocurrency bitcoin is moving out of a slump and made advances in fifth consecutive sessions to now trade at $44,700. At the same time, the firm said, equities have hit a “speed bump since the start of the year.”
Over the last few days, the price of BTC moved up over 20%.
Bitcoin’s price rise has seen it move over its 50-day moving average, a key technical level, suggesting its downtrend is reversing. A moving average is a stock indicator commonly used in technical analysis that helps smooth out price data and eliminate the impacts of “random, short-term fluctuations” on the price of an asset over a specific time frame
As reported, in a note sent to clients Mark Newton, a strategist at Fundstrat, said the rally was an important breakout that could lead to “further near-term strength. Newton added that “initial upside targets lie at $45,000 and then $51,100.”
Bespoke analyzed bitcoin’s price performance after closing above a 50-day moving average, going back as far as 2015. According to the firm, the cryptocurrency has tended toward “significant outperformance” relative to the norm in the week, month, and 3-month periods after closing above the key technical level.
In July 2021, the flagship cryptocurrency closed above its 50-day moving average after staying below it for 76 days. After doing so, its price went up 13% in a week, and 72% over the next six months.
Bespoke noted that six months after going above the technical level, BTC’s price performance has been consistently positive, with only one decline seen during the 2018 bear market. The firm added:
One year out has seen positive performance following each of these past instances with a median gain of 122%, but that is basically right in line with the historical median one-year gain since 2014.
Earlier this week strategists at JPMorgan Chase led by Nikolaos Panigirtzoglou have revealed they see Bitcoin’s current “fair value” at around $38,000, roughly 12% below its current price, while their theoretical BTC price target is at $150,000.
Robert Kiyosaki, the highly successful author of the “Rich Dad Poor Dad” series of personal finance books, has suggested that the flagship cryptocurrency bitcoin is part of the path to “financial heaven,” along with precious metals gold and silver.
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