Over the course of 2019, Bitcoin (BTC) crossed the $10,000 mark seven times. However, each time the world’s number one cryptocurrency failed to hold the price for more than a couple of days. This year, BTC has moved up and down the 10k mark several times yet again, but the major difference is that it has occurred over a 2 week period, whereas in 2019 it was over a four-month period. This goes to show that volatility in the market is back.
2020 has seen the coin’s best start to a year for seven years, having risen up 30 percent in the month, briefly surpassing the $10,000 mark on February 9. This was the first time bitcoin touched these levels since October last year.
The break above $10,000 was short-lived, as soon after touching $10,200, Bitcoin price fell over $250 in a matter of minutes to settle in the $9700 region. The token regained its position above 10k on February 11th after the formation of a descending wedge pattern which is often considered a bullish indication for the price about to break upward.
On February 15th, BTC yet again lost the $10,000 level and plunged 3.8% after a strong rejection near the $10,500 region. There was a close below $10,000 and the 100 hourly simple moving average. The price failed to hold above the $9,800 support area and it gradually dropped 8.76% to $9,444. The $300 drop was the second time in a week that BTC failed to break past the $10,500 resistance level.
The Golden Cross
Following the bearish weekend, BTC is back above the $10,000 mark and is currently priced $10,122 at press time. Analysts believe that the recent golden cross on BTC’s daily chart has been the reason behind the recent rally. The golden cross is known to be a bullish sign considering the fact that last time this happened, BTC jumper 170% in 2 months.
Crypto analyst The Moon said that the golden cross is the sign of the momentum shifting in favor of the bulls. His tweet read:
Despite the bearish weekend, a golden cross between the 50 and the 200-day moving average was unaffected and the relative strength index (RSI) on the daily timeframe remained near 50.
The upcoming Bitcoin halving is one of the many factors that most analysts are bullish about. When the halving takes place, the leading cryptocurrency will have an inflation rate of 1.8%, less than that of gold and US Dollars. Theoretically, lowering supply and increasing demand should push the price of any asset.
Right before the last halving, we saw a similar golden cross chart formation on the BTC/USD chart, which led to a 218% increase in price as Bitcoin hit its all-time high. Traders seem to be positioning themselves in anticipation.
As of now, BTC is back above the 23.6% Fibonacci retracement level at $9,500 and also above the 20-MA of the Bollinger Band indicator. Popular crypto analyst and trader UB thinks that BTC could see an upward rally towards $10,600. He tweeted:
Many crypto analysts even believe that we will never see BTC price under 10K again, with the golden cross, it may actually be the final catalyst to push Bitcoin’s price into 5 figures permanently.
Last week also saw the CME close at $10,475 and as BTC dropped; it created a gap to fill. Many traders believe that should the CME gap fill, BTC would ride back to the $10,500 region. Before filling the gap, Bitcoin price will need to overcome the $10,168 to $10,330 zone, which the volume profile visible range (VPVR) suggests could be a challenge.