Bitcoin surges 9% as it punches through 2 key technical resistance levels
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Bitcoinsurged as much as 9% on Friday and reclaimed two key technical resistance levels.
- The popular cryptocurrency punched through its 50-day and 200-day moving averages.
- Bitcoin still faces short-term resistance near $53,000, representing potential upside of 11%.
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Bitcoin jumped as much as 9% on Friday, helping the cryptocurrency reclaim two key technical resistance levels closely monitored by traders.
Bitcoin punched through its 50-day and 200-day moving averages on Friday, which if decisively held into Saturday, could signal that bitcoin is ready to continue its long-term uptrend and target its next resistance level near $52,900.
That's according to technical analyst Katie Stockton of Fairlead Strategies, who argued in a note earlier this week that bitcoin's long-term uptrend remains intact. That's despite short-term momentum turning negative in recent weeks after bitcoin fell below its widely-followed moving averages.
But Friday's rally has reinvigorated bitcoin's short-term momentum to more positive than negative, and now Stockton is specifically looking for bitcoin to post decisive consecutive closes above $48,800 to help counter short-term sell indicators generated by the technical DeMARK indicators.
"There is a new a counter-trend signal from the DeMARK Indicators that could prevent follow-through, so we would feel more comfortable moving to a bullish short-term bias once this signal is invalidated, which in our work would require 2x closes above $48,800," Stockton told Insider on Friday.
Moving averages are a lagging trend-following indicator that technical analysts use to smooth out price movements and help identify the direction of the current trend in place.
Traders view the the 50-day moving average, which is the average daily closing price of a stock over its previous 50
On Friday, bitcoin's 50-day moving average stood at $46,621, while its 200-day moving average was $45,193. The cryptocurrency traded at $47,233 at time of publication.
If bitcoin is able to surge an additional 12% and clear Stockton's next targeted resistance level of $52,900, the cryptocurrency would be well set for a continued push to its prior record high of about $65,000, representing potential upside of 38% from current levels.
AdvertisementBut if bitcoin fails to sustain Friday's surge above its 50-day and 200-day moving averages, Stockton sees support near $39,900 being in play, which would represent potential downside of 15% from current levels.
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