For three weeks in a row, the Bitcoin market cap has held its ground above the 50-week moving average, an indication of changing risk appetite as the market moves on from an extended period of bearishness. In the view of Blockchain Backer, such a technical development may well be the first sign of a more far-reaching bullish trend to come.
Bullish Signals Emerge After Extended Bear Market
The most recent work by Blockchain Backer identifies a technical milestone in Bitcoin: for three weeks in a row, the asset has closed with its total market cap above the 50-week moving average. In past cycles, such a formation has been the harbinger of a risk-on atmosphere and the end of a bear market.
After an extended period of weakness, the market has shown a bullish divergence, and this holding above the 50-week mark is taken as evidence that investor sentiment has turned, says Blockchain Backer. Yet the analyst is careful to note that one should not read too much into it; while encouraging, it is not an indication of an altcoin season or a full expansion. A look at Bitcoin’s dominance figures shows the market is merely putting in a bounce from the lows and there will be plenty of room for movement before a true breakout is in sight.
XRP Lags Behind but Shows Potential
Bitcoin has been able to deliver a performance that puts it well above the 50-week moving average and hold its ground. XRP, on the other hand, lingers close to that same benchmark. Blockchain Backer sees this as a sign of some latent strength in XRP given how near it is to the 50-week line, though a true breakout has not been established. All in all, there appears to be potential for XRP to grow, provided the market remains favorable and Bitcoin does not lose momentum.
In the analyst’s view, when you have an asset of XRP’s caliber consolidating around a key moving average like this, it is often a prelude to something more significant on the upside. But one has to be patient; these kinds of scenarios do not resolve themselves overnight.
Navigating the Coming Market Range and Macro Factors
According to Blockchain Backer, the market is poised for a period of range-bound choppiness before a definitive breakout occurs. Traders would be well advised to temper their time horizons; past data shows such phases are prone to volatility and higher liquidation rates. The analyst is calling for patience on the part of traders, pointing out that an extended spell of sideways movement is typically what comes before any substantial upward trend.
There is also the matter of macroeconomics to consider in what will drive the next big move. A crossover of the 100-day moving average over its 200-day counterpart could well be the catalyst for more bullish sentiment. In the meantime, Blockchain Backer cautions against being swayed by talk of manipulation or general euphoria. History shows that those who can remain patient in these conditions will find some appealing opportunities to buy.
This article reflects the channel author’s opinion and is not investment advice.
Every call by Blockchain Backer and how it played out — in the BuyCrypt bloggers tracker.
Source — Blockchain Backer: https://www.youtube.com/watch?v=22UJW48QFRA
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