Bitcoin Bounce - King of Coins moves over 50-day moving average
Bitcoin rose on Friday and that weekend momentum plus a positive early morning move by stocks gave Bitcoin another bounce today. The King of Crypto hit its highest level in a month crossing the $44.5K level before a little pullback, the highest since it was over $47K back on January 5th.
Bitcoin moved ahead of its 50-day moving average of $42,838 for the first time since November of last year as investors were feeling a bit more bullish after a tough January. The Relative Strength Index (RSI) as seen in the chart below shows BTC climbing above that resistance level which looks at price data from the previous 12 months.
The jump didn't come on the back of any major news today as Bitcoin prices have been generally more and more fixated on economic news. Last Friday the better-than-expected jobs report sent BTC higher along with stocks and other cryptos. This week we have the release of the the consumer-price index report on Thursday and that will have investors eagerly tuning in around 8:30am EST in the US. With the Fed expected to start raising interest rates next month, the CPI report will give a good indication of how much inflation occurred in January and how much the Fed needs to act (or raise rates) to dampen it.
Crossing the $44.5K level was a major development for those who watch technical breakouts. The digital coin is on its way to completing a “bull flag" at the $46K mark, which I believe will be the next major resistance level. Those that follow the Fibonacci retracement levels will be looking for BTC to cross the $47.6K mark signaling a true breakout. Fibonacci retracement levels are horizontal lines on investment charts that indicate where both support and resistance levels are at. They stem from Fibonacci’s sequence, a math formula that originated in the 13th century and are based on numbers found throughout the natural world and many investors feel apply to economics as well.
Support and resistance levels like these are used by investors as price levels to purchase and sell investments like stocks and cryptocurrencies. When investments can hold gains over these figures it is a good sign that the investments will continue to move even higher.
Ethereum continues to climb relatively in line with Bitcoin as do many other altcoins. I am particularly bullish on ETH right now and believe it is somewhat undervalued given its potential growth due to continued development within DeFi, NFTs and other Web 3.0 applications. I also see growing optimism with the second largest cryptos eventual release of its proof-of-stake mechanism in the second half of 2022.
Ripple's XRP token was among the biggest winners today seeing a price surge and gain of around 20% on the expectation of a settlement in court case in which the SEC (Securities and Exchange Commission) said that blockchain-based payments firm sold XRP as an unregistered security to the public. This is also a good sign to the crypto market overall in the United States where regulatory pressures are mounting.
