The price of the cryptocurrency rose more than 3% to $73,700 in 24 hours, surpassing the 50-day moving average, which stood at $71,125 at the time of writing.
The positive price action follows a day of resilient performance amid the war in Iran and global stock market turmoil, particularly in Asian markets.
The so-called 50-day moving average is one of the most frequently followed indicators of momentum in the market, which analysts recently cited as one of the significant resistance levels preventing gains.
“This indicator often signals a medium-term trend, and a confident break above it would be an important turning point in the coming days,” Alex Kuptsikevich, senior market analyst at FxPro, said in an email.
However, keep in mind that a bullish breakout does not necessarily promise a sustained uptrend. For example, the previous one in early January was followed by an 8% price increase, but the momentum lasted only two weeks before selling resumed. Previous cases have also produced mixed results.
For now, the breakout indicates continued upside and possibly increased volatility as prices approach the $75,000 mark, SEEbiz reports. This is the level at which market makers — those who ensure a smooth trading experience by providing liquidity to the exchange — hold net short gamma positions worth billions, as CoinDesk noted on Friday.
So, as prices move towards $75,000, they are likely to buy high to rebalance their net exposure to neutral. This could increase market volatility.
