As the price of BTC rebounds by US$40,000, the Bitcoin fractal that predicts a rebound in 2020 will flicker again


A cross between two bitcoins (Bitcoin) The moving average that appeared before the price surge in 2020 implies a return in 2021, just as the flagship cryptocurrency has a bullish breakthrough from the current trading range of $30,000 to $40,000.

The key indicators are the MACD line and signal line. MACD is the acronym for Moving Average Convergence Divergence, and the MACD line represents the difference between a 12-period and a 26-period moving average. At the same time, the signal line is a nine-period moving average.

Draw the MACD line and the signal line together to form the so-called MACD indicator, allowing traders to predict future price trends. For example, when the MACD line (faster moving average) closes below the signal line (slower moving average), it usually reflects an ongoing bearish trend. Conversely, when the MACD line closes above the signal line, the trend turns bullish.

Bitcoin MACD trend since March 2020. Source: TradingView

The difference between the two moving averages forms a histogram. If the faster moving average is far away from the slower moving average, it indicates that the MACD is diverging. Similarly, when the faster moving average is close to the slower moving average, the crossover is called MACD convergence.

Bitcoin price and MACD comparison

In 2020, Bitcoin prices will react Accurate to MACD crossThe figure below illustrates the above correlation.

Bitcoin price-MACD weekly correlation. Source: TradingView

The recent bearish crossover between the MACD line and the signal line led to a decline. Likewise, a bullish crossover led to a sharp rise. The histogram indicator shows the strength of the upward and downward movement based on the difference between the MA​​​CD and the signal line.

Now that the histogram is returning to zero, the two lines are looking for potential MACD convergence.same Fractals last appeared in March 2020After that, the price of Bitcoin rose sharply from US$3,858 to approximately US$65,000.

Preston Pysh, the founder of the equity investment company Pylon Holding Company, expects MACD fractals to be familiar. The analyst wrote on Twitter:

In addition, in a notes Katie Stockton, founder and managing partner of Fairlead Strategies, wrote in an article published in July that Bitcoin’s “mid-term momentum” is improving due to the MACD histogram.

A decisive breakthrough is expected

But the spot market largely ignored the long-term upside prospects of Bitcoin, because the asset has repeatedly struggled to break through $40,000. Its previous attempts to extend its upward momentum beyond the aforementioned levels have encountered extremely high selling pressure.

At the same time, on a brighter note, an equally strong Buying sentiment is close to 30,000 USD Limiting the price of Bitcoin to pursue a deeper downtrend. As a result, equally confident bulls and bears trapped Bitcoin in the $30,000 to $40,000 price range.

related: Before the expiration of the $625 million option on Friday, the Bitcoin bulls broke the $40,000 mark

Pankaj Balani, CEO of Delta Exchange, predicts that if the Bitcoin market can stay above $40,000 within a week, it will see a bullish breakthrough.

“After finally breaking through the $40,000 level, BTC may challenge the $48,000 level,” the executive Say.

“The downside is that traders will pay close attention to the $36,000 level. If it drops below $36,000, BTC can quickly rise to the range of $28,000 to $32,000.”

Bitcoin was trading at $40,723 at the time of launch.

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