Bitcoin expects to hold its long-term bullish bias as long as it trading above $8,800, according to market analyst Mohit Sorout.
- Bitcoin expects to hold its long-term bullish bias as long as it trading above $8,800, according to market analyst Mohit Sorout.
- Bitazu Capital’s founding partner based his analogy on three bullish technical indicators, each signifying a favorable buying sentiment in the cryptocurrency market.
A modest rally in the Bitcoin market on Tuesday promised to improve its short-term outlook. A day later, the cryptocurrency corrected lower on profit-taking sentiment, signaling it may negate all its recent gains in favors of bears.
However, Mohit Sorout believes the next Bitcoin plunge will do very little in setting up a stronger bearish bias.
The founding partner at India-based hedge fund, Bitazu Capital, stated that any downside pullback till the $8,800-level will attract buyers. Overall, it should keep Bitcoin’s year-to-date gains in positive territory.
The bullish analogy took cues from a string of indicators that reflected growth in the BTC/USD market. Mr. Sorout first referred to the Golden Cross patterns forming across the cryptocurrency’s multiple moving averages.
#1 Bullish Crossovers
On May 19, for instance, Bitcoin’s 50-day moving average closed above its 200-day moving average. More than a month later, the cryptocurrency’s 100-day moving average also crossed above the 200-day one.
BTCUSD golden crosses formation. Source: TradingView.com
Traders interpret such crossovers as a sign of growing buying sentiment. The 50-200 Golden Cross from 2019, for instance, has shot BTC/USD upward by as much as 270 percent within three months after its formation.
“50×100 & 50×200 Golden Cross is a powerful signal of long term appreciation,” asserted Mr. Sorout.
#2 Bitcoin Hash Ribbons
Mr. Sorout coupled the Golden Cross indicators with Hash Ribbons to strengthen Bitcoin’s long-term bullish outlook. Hash Ribbons identity the cryptocurrency’s price bottoms and peaks by analyzing the behavior of entities that mine it.
In simple terms, when a Hash Ribbons return “Capitulation,” it means that miners are selling more tokens than they are mining. Its opposite, which is “Accumulation,” shows miners are holding more and selling less.
BTC Hash Ribbons signal buying sentiment. Source: TradingView.com, Mohit Sorout
Mr. Sorout highlighted that the Hash Ribbons on a BTC daily chart has signaled a buying sentiment, adding that even a pullback won’t do much harm to the cryptocurrency as long miners limit its supply to the retail markets.
#3 Mining Revenue Stabilizes
Another indicator that shows Bitcoin miners in a healthy shape is Miner’s Revenue.
Mr. Sorout highlighted that the mining profits have stabilized following Bitcoin’s third halving on May 11. The event effectively slashed the cryptocurrency’s daily reward from 1,800 BTC to 900 BTC, leaving miners with half the revenue than they used to make earlier.
As a result, capitulation increased, which, in turn, left BTC/USD in distress. But with miners’ revenue stabilizing, the selling pressure in the BTC/USD market appears to have been easing, as well.
BTC miners' revenue stabilizing after halving. Source: TradingView.com, Mohit Sorout
“Bitcoin trend is up, miner’s revenue metric paints a bullish picture,” wrote Mr. Sorout.
The BTC/USD exchange rate was trading 0.53 percent lower on Wednesday.