The Bitcoin price has been doing rather well of late. The number one digital asset has surged more than 100 percent in 2019 alone and many crypto market analysts are calling for more upside to come.
Crypto technical analyst and CEO of tech consultancy firm NodeSource, Joe McCann, is one such voice. He has highlighted that the recent uptrend of the 200 day moving average (DMA) could be an indicator of the start of a “prolonged bull market”. He uses the Bitcoin market’s previous performance versus the 200 DMA to back up his theory.
Joe McCann: 200 DMA Reversal has “Massive Implications for a Bull Run”
Self-proclaimed “market mercenary” Joe McCann has speculated that the recent moves in the Bitcoin market could be the start of something much bigger. The NodeSource founder and CEO posted a lengthy Twitter thread summarising the potential implications of Bitcoin’s 200 DMA starting to trend upwards recently.
In the thread, McCann compares the current situation in the Bitcoin market to previous times where the 200 DMA has turned upwards again. First, he looks at the reversal prior to the 2013 bull market. It occurred on June 6 and preceded a continued increase in prices that followed almost uninterupted for the next 761 days.
The 200DMA finally turned to the downside two years following the initial reversal. During the period, the Bitcoin price increased by a vast 23,308 percent. McCann speculates of such a simple system could be used to trade crypto markets over longer time periods for potentially huge gains:
“Note, the percentage gain does NOT include the all-time-high (ATH) as the 200 DMA by definition will never reach the topmost value for a period. The idea here being if one invests only when the 200 DMA turns up and sells when it slopes down, you netted a 23,308% return.”
The second example McCann draws on is from before the 2017 bull market. This time, the 200 DMA started heading upwards on October 10, 2015. Those who bought Bitcoin on this date and sold as the indicator started pointing down in the summer of 2018 would enjoy 961 days of general upside and a total percentage gain of more than 7,500.
McCann concludes by stating that the recent reversal of the simple technical indicator could mean big things for the Bitcoin and wider crypto market:
“History doesn’t repeat itself, but it does influence the future. If the 200 DMA is of any use to us, then we are setting up for a prolonged bull market in bitcoin.”
Crypto Bullishness Everywhere
It’s not just the technicals that are indicating that we could well be in the early stages of a full-blown mania like those that have previously shocked the world with just how high Bitcoin prices can go. If you browse Twitter, you’ll see increasing reports from long-time proponents of crypto stating that friends and relatives are once again asking how to buy into digital assets:
Likewise, the Bitcoin and Cryptocurrency subreddits are full of typical newcomer posts. Simple questions such as setting up a wallet for the first time or enquiring about which exchange to invest $1,000 on are becoming more common by the day.
As we’ve seen before, as prices begin to rise, the fear of missing out on the next shot to the moon can inspire a frenzy that leads to prices unimaginable just weeks previous. However, the difference this time, as highlighted by Max Keiser yesterday, is that institutional investors could well feel the FOMO too.