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A widely held momentum indicator has turned bullish for the first time since April.
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A similar bullish flip occurred at the start of the late 2023 and late 2022 rally, marking the end of a brutal downtrend.
A bitcoin {{BTC}} indicator that warned of seller exhaustion in early September has turned bullish, strengthening the case for a move above $70,000.
The moving average convergence-divergence (MACD) histogram, a technical analysis indicator used to measure the strength and changes of trends, has turned positive on the weekly chart for the first time since April, according to charting platform TradingView. It marks a renewed upward shift in momentum, implying a bullish resolution to Bitcoin’s long-term back-and-forth trade between $50,000 and $70,000.
The positive technical outlook is consistent with the consensus view that the Fed’s renewed preference for rate cuts, the growing likelihood that supposedly pro-crypto Republican candidate Donald Trump will win the November 5 US elections, and the weakness of the anti-risk Japanese yen will likely be the driving force behind Bitcoin. to at least $100,000 by the end of December.
The MACD is calculated by subtracting the average price level of bitcoin over the past 26 periods (in this case, weeks) from the average over the past 12 weeks. The signal line is then calculated as a nine-week average of the MACD and the difference between the MACD and the signal lines is plotted as a histogram.
It is one of the most followed indicators out there, and the way it moved against the cryptocurrency’s price in the first half of September indicated the exhaustion of the downtrend.
Bitcoin has risen nearly 30% since hitting a low below $53,000 in early September. The leading cryptocurrency by market value rose to $69,500 during Asian trading hours on Monday.
The MACD’s latest bullish signal follows a similar flash from last week’s line break chart and suggests that bulls may finally manage to gain a foothold above the $70,000 mark after having been there since the failed several times in the first quarter.
A similar MACD bullcross occurred in October last year, when Bitcoin pushed past the long-held resistance at $30,000, eventually hitting an all-time high above $73,000 in March this year. The late 2022 bullcross marked the bottom of the bear market.
