As of the time of writing this piece, BTC trades at $10,900, just shy of the key resistance of $11,000, but located slightly above another important level, $10,800. According to Financial Survivalism, a prominent analyst, the next 24 to 48 hours will be essential to watch for Bitcoin and the broader cryptocurrency market.
Out of nowhere, Bitcoin (BTC) has surged higher over the past couple of hours, catching many traders with their pants down as normal.
In a tweet, in which he noted that BTC was looking somewhat bearish at $10,500 just a day ago, Survivalism explained that should Bitcoin hold above $10,800 for a day or two, it could be poised for “significantly more upside”. Per his analysis, the cryptocurrency sustaining such a price would ensure that the 50 four-hour moving average and 200 four-hour moving average don’t experience a death cross.
Death crosses are, of course, when a pair of moving averages, usually one of short-term importance and one of long-term importance, cross to signal that there is more downside for a given asset.
When he published the tweet, however, he did note that the chances of Bitcoin completing such a positive price signal stood at 30% to 35% at most. It is unclear if his analysis has changed since his original analysis.
BTC setting up base at $10,800 may just become a reality, according to some indicators. As Chonis Trading pointed out in a recent tweet, the Chaikin Money Flow Index, which measures the buying and selling flow of an asset, recently bounced off the zero line on the one-day Bitcoin chart.
The last time this event occurred, the cryptocurrency market saw “months of bullish continuation”. Should history repeat itself, BTC could see strong gains in the weeks to come.
There may be a reason for pause, though. As crypto-centric fund manager and investor Timothy Peterson pointed out in a recent tweet, the historical probability of Bitcoin falling through July and August is quite high. In fact, as depicted in the chart below, BTC fell during 70% of previous Augusts.
Also, according to Peterson’s model of the cryptocurrency’s fundamental value, which takes a 30-day median (as of July 13th) of the number of active accounts on the Bitcoin blockchain, BTC currently has a fair valuation of just above $8,000.
Sure, Bitcoin has deviated from its fundamental value on certain trading days, but as the analyst explained in a different tweet, in the medium to long term, network value should reflect actual value.