Key Technical Indicator Reveals Bullish Bitcoin Signal. Is it Time to Buy Again?
Bitcoin’s price is currently flirting with $12,000 USD and a key technical indicator just turned bullish, meaning the market might just about to be hitting a new buying cycle. This in spite of the fact that Bitcoin is worth nearly four times more today than it was when it plummeted all the way down to $3,100 USD when the coronavirus spread throughout Canada and the rest of the world in March of this year.
What is Signalling a Buy?
The technical indicator signalling its time to buy bitcoin is known as the Trading Envelope band. An envelope is a comparison between two moving averages with the one shifting upward and the other shifting downward. It allows traders to form trend lines above and below the current price of an asset, which in this case is Bitcoin.
Another indicator signalling a buy is the Global Strength Indicator. It shows that despite the fact Bitcoin’s price has been steadily rising over the last little bit, it’s not actually in overbought territory, which means there is still room to go up.
What’s the Reason for These Signals?
There are perhaps two key reasons these signals are sending out bullish alarm bells. One is the decentralized finance revolution. Most decentralized finance projects that allow traders to capitalize on yield farming are built on the Ethereum blockchain. This is sending all the coins higher, which in turn can also give investors added confidence in the leader of the pack, Bitcoin.
The second fundamental reason for these bullish signals involves broader institutional investment. Fidelity investments launched its first Bitcoin fund last month and JP Morgan Chase & Co. now owns a significant stake in ConsenSys, which is arguably the largest, most forward-thinking blockchain development company in the world today.
For these reasons, now might actually be a great time to buy some more Bitcoin both for short-term and long-term investment. At least according to technical indicators.
Written by: Jack Choros
Writer, content marketing at Netcoins.