Following a series of bearish trends, this past week saw Bitcoin and the broader cryptocurrency market demonstrate a significant trend reversal by gaining 8% in a short period. After Bitcoin’s decoupling from U.S. equities, the king coin has been attempting to catch up with this relief bounce.
Although bitcoin has had a week of volatility, the largest cryptocurrency in the market has recorded its first green weekly in three months. At the time of writing, Bitcoin trades at $31,256.62, up by 6%, having a market cap of $595.7 billion, according to Coingecko.
According to technical charts, Bitcoin is showing strong resilience as it continues to trade well above its 200-day moving average (DMA). Earlier last week, Bitcoin beat the $31,000 mark when it peaked at $32,000, only for the jubilations to be cut short as sellers jumped in and knocked the price back down. In the explanation of Rekt Capita, a popular crypto analyst, “Historically, BTC tends to bottom at, around, or just under 200-week moving average…$BTC would need to lose a further 25% to reach the 200MA.”
Bitcoin hasn’t recovered from its bearish woes as it experienced three consecutive months of being in the red. January ended with a massive decline with a loss of almost 16%. February and March saw Bitcoin on a tear with bulls, but April erased all these rallies. May was regarded as one of the favorable months for Bitcoin. Bitcoin has closed six green monthly candles in the last ten years with an average return of 17%.
After citing figures from CoinMetrics, Bloomberg indicated that Bitcoin miners sent roughly 200,000 BTC to exchanges in May, suggesting the beginning of a bullish run. However, investors need to exercise vigilance and caution as the market could exhibit signs of another bear market. Bitcoin seemed to have gotten to a tipping point towards the end of May. After about ten weeks, the bulls closed a green candle for the first time, which means Bitcoin may start a bullish run.
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