5 Bullish Signals for Bitcoin Market & Why it is “Perfectly Positioned For A Super Cycle”
- Spike in volatility signals the “start of a bumpy period” while the Fear and Greed Index hit Greed for the first time since mid-August
- The key technical indicator turns bullish while Bitcoin Misery Index bottoms & rebounds
- Massive Price Gains and China’s Friendly Policy
- S&P 500 Recorded New ATH ahead of Fed meeting
- In the current global environment, BTC is perfectly positioned for a supercycle
Since surging to $10,500 on Oct. 26, Bitcoin has been trading above $9,000 levels. Currently, we are down by 2.39% while managing the daily trading at $501 million.
The same week, Bitcoin hit $10,500, the price saw a five-month low. All these movements in BTC price have the 30-day bitcoin volatility jumping to 4%, doubling over the last month. If we look at the first half of 2019, this spike in volatility, can be the “start of a bumpy period for bitcoin,” reports Arcane Research.
Moreover, the Fear and Greed Index is now at 54, a sign of “Greed,” a level not seen since mid-August.
But these aren’t the only signs that say Bitcoin is getting ready for some positive action.
Massive Price Gains, China’s Friendly Policy
On Friday, BTC price went from $7,400 to $10,500, registering a massive 42% spike in less than 24 hours. This was one of the largest, third actually, move in BTC’s history.
This surge commentators pointed towards China’s President Xi Jinping’s announcement about China embracing blockchain as the main catalyst. Given that Bitcoin is still banned in China, this announcement though not directly related to cryptocurrency, coming right from President could be positive for the industry.
As a result, we saw a significant spike on the internet searches for Bitcoin and blockchain on Baidu, WeChat, and Weibo. Chinese altcoins also registered a strong rally during this period.
Key Technical Indicator turns Bullish
For the first time in over three months, the three-day chart MACD turned bullish. This could be very bullish for BTC price and we could see a new 2019 high before the year is over.
Last week, BTC price smashed through the 200-day moving average (MA) and is now just below the 100-day MA that acts as resistance. If this resistance holds, BTC could re-test 200-day MA that can act as a new support level or we move down and find support around $8,500.
Bitcoin Misery Index Bottomed & Now Rebounding
The “Bitcoin Misery Index” developed by Fundstrat’s Tom Lee that has been lying dormant and trendless since July has now bottomed. On Oct. 24, the Index bottomed at 36, pointed Lee on Twitter adding it is now rebonding which is a positive signal for Bitcoin price.
A lot of ‘signal’ past few days in crypto and #bitcoin
– China (friendly policy)
– New ATH S&P 500 (positive)
– Bitcoin Misery Index bottomed 10/24 at 36 and rebounding (positive)
– Massive price gain on $BTC friday (signal)
Interim ‘risk-off’ ended, and bull market resumes.
— Thomas Lee (@fundstrat) October 28, 2019
Misery Index ranges from 0 to 100 and uses contrarian (a style where investors go against prevailing market trends) economic indicators. Back in late June, the index hit its all-time low in early March, the lowest level since 2011. And Q2 of 2019 was when we saw BTC registered 161.50% gains.
Now, with the index hitting bottom yet again, it might be time for another bull rally.
S&P 500 Recorded New ATH ahead of Fed meeting
Another sign of a coming bull market, according to Lee is S&P 500 hitting new highs. On Tuesday, S&P 500 made a fresh record high and investors are betting that solid earnings, a US-China trade truce, and favorable economic data would only boost the market further.
This ATH hit by S&P 500 has been the second-biggest largest-ever bull market in 3,855 days.
Previously, Lee had said for Bitcoin to blast off, we need new highs in S&P 500 as crypto is retail and “thus, risk on.”
The US central bank, meanwhile, is also expected to lower interest rates by 25 basis points, which would mark the third time this year the Fed cuts rates.
“Perfectly positioned for a supercycle”
According to Dan Hedl, director of business development at crypto exchange Kraken, Bitcoin is “perfectly positioned for a supercycle.”
Bitcoin is perfectly positioned for a super cycle:
– Central Banks are printing more than ever
– Global debt as a % of GDP is the highest its been in recorded history (peacetime)
– Structural risks in the financial system haven’t been resolved
I’m not fucking selling. pic.twitter.com/UFCpEprSM9
— Dan Hedl (@danheld) October 29, 2019
A few weeks back, in a podcast, he said that the leading cryptocurrency may undergo a supercycle if Bitcoin is accepted by institutional traders as a “risk-off trade or a safe haven asset,” in 2010-21.
In the past few days, there have been several ‘signals’ in crypto and bitcoin. Now that the “interim ‘risk-off’ (has) ended,” Lee said, “bull market resumes.”