After reaching an all-time high near $64,000 in April, then plummeting to less than $30,000, then hovering there for weeks, the price of bitcoin has been climbing back up since the end of July to trade above $46,000 on Monday,
Bitcoin has cleared three tiers of resistance in the past three weeks — the 50-day moving average, the cloud model and, as of Monday, the 200-day moving average, according to Fairlead Strategies.
The 200-day moving average is a term used in stock trading to determine the general market trend. It’s line on a chart that represents an average price over the past 200 days or 40 weeks. The moving average can give traders a sense of whether the trend is bullish or bearish, while also identifying potential support or resistance areas.
Bitcoin was trading at $45,801.29 on Monday as of this writing — its highest level since May 16, when it hit $49,770.33, according to Coin Metrics.
On Sunday, the Senate delayed the vote on the infrastructure bill to Tuesday to allow for more time to debate two competing amendments to a crypto tax provision, which was initially included in the bill to help the government raise $28 billion for the infrastructure spending. It’s likely that’s increasing optimism among traders, said Chris Brendler of D.A. Davidson.
The bitcoin community beefed up lobbying efforts in the past week, CNBC reported. Markets are probably reacting to the fact that crypto has a growing number of allies on Capitol Hill, said Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, on CNBC’s “Squawk on the Street” Monday.
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“There has been a surprisingly large pro-crypto stance taken in the course of this,” SBF said. “A lot of senators have ended up taking crypto stances that never said anything before publicly. It’s showing there’s a much bigger presence in Washington of cryptocurrency interest than people expected.”
Bitcoin’s push to higher price highs (HH) and higher price lows (HL) was precipitated by a short squeeze on Friday in which 126 BTC short positions liquidated, Datamish data shows.
“Bitcoin’s HH and HL bullish charting pattern tells of the risk-taking mood currently brewing in the market which has driven prices toward the 200-day moving average – a significant marker of bullish activity when prices are above and conversely bearish when below,” Sebastian Sinclair reported for Coindesk.
The 200-day moving average at approximately $45,000 has provided some resistance, said Toby Chapple, head of trading at digital asset firm Zerocap, in a CoinDesk interview. “A clean break here could lead to the next accelerated push higher,” Chapple said.