After several months of trending lower, Bitcoin looks ready to rally.
The King of the Cryptocurrencies lost about half of its value in the back half of 2019. It bottomed in December at about $6,600 per coin, and it has been stealthily moving higher ever since. And, the action this week sure looks bullish to me.
Look at this chart of the NYSE Bitcoin Index ($NYXBT)…
The 50-day moving average (MA) – the squiggly blue line on the chart above – helps to define the intermediate-term trend of an asset. If an asset is trading above the line, then the trend is bullish. If the price of an asset is below the line, then the trend is bearish.
The price of bitcoin just popped back above its 50-day MA. That’s bullish.
More important, though, is the action in the shorter-term moving averages. The 9-day and 20-day exponential moving averages (EMAs) are on the verge of crossing above the 50-day MA. This sort of “bullish cross” often signals the start of an intermediate-term rally phase.
The last time the price of bitcoin popped above its 50-day MA, and the 9-day and 20-day EMAs completed a bullish cross, was back in February last year. That marked the start of a four-month-long rally. The price of bitcoin soared more than 200% during that time.
I don’t think we’ll see the same sort of move this time around. But, if the short-term EMAs can cross above the 50-day MA, then bitcoin is headed higher.
A move back up to last year’s high near $13,000 is possible. That would be a gain of more than 60% from Monday’s closing price.
Best regards and good trading,
Jeff Clark
Reader Mailbag
Today in the mailbag, Market Minute reader Peter responds to Jeff’s essay on Social Security…
While what Jeff Clark says about social security is true, there are other facts (not alternative facts, but other facts) that are equally as true. Like a fixed annuity, you will not outlive your money with Social Security. But, while a fixed annuity could pay you up to 4%, you will need a large pot to start with to get that rate. Thinking that way, would you want to put that money in a mom and pop insurance company or the U.S. government?
No matter how smart you think you are, you could lose your total investment with bad decisions, or a nasty turn of events – Social Security is still there for you. If your wife outlives you (or merely leaves you), she gets most of those savings for the rest of her life, too. And lastly, the U.S. system is partly libertarian, partly democratic, and partly socialist – you get to pay something for those too infirm, or too foolish, to save on their own.
Perhaps a society (or a man) can best be judged by what it (he) does for the least of us.
– Peter
Delta Report subscriber Harvey writes in with his thoughts on the service…
Jeff lays out the facts as they come up. Facts speak for themselves. I appreciate his work and I’m thankful for his opinions. He has steadied my trading.
– Harvey
And new Jeff Clark Trader subscriber, Michael, is excited to start trading with Jeff’s guidance…
Finally got my account set up to trade options and made my first trade just before Christmas with the December issue. And that’s now up to a double!
Thanks for helping me get into this way of investing!
– Michael
Thank you, Michael, for the kind note. We’re glad you’re enjoying the service.
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