Bitcoin ($BTC) recently saw a crucial technical indicator indicating that the flagship cryptocurrency’s price has begun an uptrend for the first time since December 2021, when BTC fell from around $50,000 to $43,000.
The flagship cryptocurrency is now trading above its 200-day moving average (MA) for the first time in over a year, as highlighted by prominent cryptocurrency analyst Lark Davis, after the cryptocurrency price climbed over 20% in a week to hit $21,000.
Traders and market experts regard the 200-day moving average as an important technical indicator since it helps establish general long-term market patterns. According to Investopedia, a moving average is an indicator that helps “smooth out price data by providing a regularly updated average price.”
The indicator removes the impact of random, short-term price changes on an asset’s price, and the 200-day moving average is viewed as either a strong support level if the price is above it, or a strong resistance level if the price is below it.
When an asset is trading above its 200-day moving average, it is said to be in an uptrend. Bitcoin’s price began trading above its 200-day moving average at the same time as the Fear & Greed Index rose to “neutral” with a score of 52 for the first time in months, after falling to 6 – indicating “severe fear” – with the collapse of FTX.
It’s worth noting that the indicator is based on market emotional behaviour. When fear sets in, some investors may regard it as a buying opportunity, but greed may indicate that the market is headed for a correction.
Earlier this week, a top cryptocurrency analyst who garnered a big social media following after precisely forecasting bitcoin’s 84% drop throughout that year, from over $19,000 to just over $3,000 in a year-long bear market, predicted through two charts that Bitcoin may touch $150,000 by 2025.
Peter Brandt, one of the world’s most recognized classical chartists, released charts with his nearly 700,000 Twitter followers that suggested $BTC is forming an inverse head and shoulders pattern, which might take $BTC above $30,000 by the second quarter of this year.
