Bitcoin rose sharply today to almost $40k on Coinbase, after breaking out of 50 DMA yesterday. Last night when I looked at the chart, Bitcoin had dipped below the 50 DMA line and I thought breaking this resistance level may be tough. This is when equities across the globe have opened up on a weak note. Despite the risk-off mood in the markets, Bitcoin crushed 50 DMA resistance easily.
I cleaned up my chart from earlier removing the RSI symmetrical triangle and the H&S lines. I have extended the bear flag lines on the chart and highlighted the times 50 DMA acted as support and resistance during the last year. 50 DMA should have been significant resistance. Given that it was support for BTC nearly 4 times during the last year and also prevented Bitcoin from making new ATHs, I was expecting it to not be broken so easily. Now that 50 DMA has been broken so easily, my hopes are higher for the bear flag and the white line not becoming a significant roadblock for Bitcoin. The most important resistance level on the chart is 200 DMA and we are still away from that. RSI has also shot up sharply. Consolidation just below 200 DMA for some days should be healthy before a breakout of 200 DMA is attempted.
We will see what Bitcoin does over the coming weeks. For now, let the optimism rise and let it pave the way for new year-end predictions that also hit new all-time highs.