Bitcoin breaks 200-day moving average, signals trend change

Bitcoin crossed $23,000 (21) on Saturday morning, also rising above its 200-day moving average for the first time in a year. This is a much-watched long-term indicator, as crossing the moving average can signal a change in trend direction.

“Bitcoin has broken its 200-day moving average for the first time in over a year due to the strong rally over the past 2 weeks”said Jack Neureuter of Fidelity Digital Assets Research.

The last time bitcoin dipped below its 200-day moving average was in January 2022, almost exactly one year ago. A bear market year followed, with the price falling from $69,000 to $15,000 the day FTX was declared bankrupt in November.

It has since rebounded, albeit at levels that the general public might feel is still stuck in the cryptocurrency winter. Sentiment appears to have shifted significantly, however, with the focus shifting to the potential upside.

Even CNBC is getting in on the game, noting that investor cash holdings are nearing a record $4.8 trillion in money market funds. That’s all in dollars that may be waiting to really invest after a bad year for cryptos, stocks, bonds and many fiat currencies.

However, investors in general are probably still cautious. The S&P500 is trying to cross the resistance line at 4000. The Nasdaq surprised Friday with a 2.5% jump.

China claims to have refocused on market opening and reform, respect for property rights and even intellectual property rights.

There is also speculative potential that they could open cryptocurrency exchanges starting in Hong Kong. Also, this China reset, if followed, would be a pretty big development that would impact assets.

When reading many investment letters, there is a long line of melancholy pointing to supply chain issues, the war in Russia, high inflation, interest rates, recession, yes, climate change, and of course the list could go on indefinitely.

It makes it feel like they’re pretty depressed by portraying 2022 as kind of a terrible year and, right or wrong, our point is more that people are probably fed up with that, especially investors.

Instead, except for Ukraine, the prospect of that low is quite optimistic, JP Morgan analysts seem to think.

For Ukraine, they are preparing for an increase. Russia has been training conscripts for months and they will now send them out in a few weeks.

The West is preparing for this by sending tanks and leopards. It may be difficult for the Ukrainian army, but we have to hope that this is the wave of 2006.

After Mission Accomplished, the armed insurgency reached the point where Iraq was torn apart in 2004. The response from the US government at the time was an increase, 100,000 new troops in 2006, which seemed like a huge number.

Trained troops, not conscripts, but that didn’t go well and made the situation worse. So much so that the public began to turn against the war at the time with the resignation of Tony Blair just a year later when George Bush left on the brand new Obama tune.

There’s not much reason to believe this Russian wave will be any different. They double the number of errors, and so they double the number of errors, not least because the Western public will be alarmed if they make any gains by forcing a response from democratically elected politicians.

And that matters, but on a principled and structural basis, because this is the first time since Hitler that a democracy has been attacked by a great power.

However, as far as the markets are concerned, the matter is now mostly in quarantine, with sanctions on both sides, now more of a 2022 story. in cryptocurrencies.

Silvergate Bank said it had $2.5 million in bankrupt Genesis. It’s a very small amount and they claim so “Silvergate’s exposure is minimal and customer deposits are and always have been kept safe.”

The Osprey Bitcoin Trust (OBTC), which you’ve probably never heard of but is similar to GBTC, has signed up for the bailout. They have $62 million worth of bitcoin in the fund and “is considering an investor bailout program.”

Since the amount is small and since these types of vehicles are long gone, now that we have ETFs in Europe and Canada, the market obviously couldn’t care less.

On the mining side, Provident Bancorp “restored cryptocurrency mining rigs in exchange for a $27.4 million loan forgiveness” September.

This shows that miners are in trouble and the bears have squeezed out as much as they could, leaving only miners who are not desperate to continue their activities.

dangerous moment

All this, as bad as it is for those involved, could show that the bears have gotten so fat that they have nothing to eat.

However, sentiment in the cryptocurrency market is still likely to be horrifying to the general public. You can’t even mention bitcoin right now, which might be a good thing because that could be just the moment you should mention it for the troll to feel it.

So we’re in “dangerous” bullish territory, as hitting $23,000 is very exciting, and amounts that were once horrific may now seem too high for day traders, and someone somewhere has to fiddle for the bears.

We may run into resistances and get more dips, but chances are we won’t see a few price points again, and this is what can make trading dangerous for those who don’t make it their day job.

Because we’re in sober times and that means if you’re going to buy, you’re waiting. In addition, the moving average crossover is often an indicator to buy, which could explain the impressive rise in recent days.

Traders say the resistance could be $25,000 but somehow these numbers seem like a joke that if it works out like before it’s a bit like saying the resistance could be $4,000.

But since no one knows for sure if this will happen, the bullfight could well become the spectacle of the year for all of us to enjoy.