Will Bitcoin Break $70K? Key Analysis on the 200-Day SMA Test

Key Takeaways:

• Bitcoin price approaches the critical 200-day SMA, which is a key level that could trigger a major price rally if surpassed.
• BTC Price surged by over 8.7% this week: Spurred by recent Fed rate cuts, with prices hovering around $63,000.
• The last breakout above the 200-day SMA in 2023: Bitcoin price to an all-time high of $70,000, fueling speculation of a similar rally.
• Institutional interest, including Bitcoin ETF approvals, is building momentum for another potential price surge.
• Caution in the market persists, with $16.42 million in long positions liquidated as traders await a clear signal.

As Bitcoin price edges closer to breaking through the 200-day Simple Moving Average (SMA), crypto enthusiasts and traders alike are keeping a watchful eye on this pivotal moment. Historically, when Bitcoin has crossed above this crucial level, it has signaled the onset of a major bullish run. Currently, Bitcoin price hovers around $63,176, marking the third time it has tested this resistance level since August 2024.

Importance of the 200-Day SMA

The 200-day SMA is a key technical indicator that traders rely on to gauge long-term market trends. By calculating the average Bitcoin prce over the last 200 days, the SMA provides a broader perspective on whether the market is bullish or bearish. When Bitcoin crosses above this threshold, it often ignites investor optimism and signals a potential upward trend.

Over the past week, Bitcoin price has climbed by over 8.7%, largely spurred by the Federal Reserve’s recent interest rate cuts. As a result, the crypto has surged to $63,000, positioning itself just shy of the $64,000 mark, which aligns with the 200-day SMA.

Read On: Bitcoin Price Prediction

Bitcoin Approaching a Critical Level

Crypto analyst Ali Martinez has pointed out that Bitcoin price’s repeated attempts to break through the $63,176 level are reminiscent of past rallies. In October 2023, Bitcoin successfully crossed the 200-day SMA at around $28,000, which eventually led to a surge to over $70,000 by March 2024.

#Bitcoin is testing the 200D-SMA for the third time since August. A breakout here could be a major bullish signal! pic.twitter.com/Y7XVMBVxN5

— Ali (@ali_charts) September 24, 2024

The market conditions today are strikingly similar. Recent developments, such as the approval of options trading for BlackRock’s Bitcoin ETF, have bolstered institutional interest in Bitcoin. With this renewed momentum, many experts believe that Bitcoin is on the verge of another breakout, potentially revisiting the $70,000 price range.

If Bitcoin manages to break through this resistance level and hold its ground above the 200-day SMA, it could attract a wave of new investors. Analysts suggest that this could drive Bitcoin prices up into the $64,000 to $74,000 range, setting the stage for a renewed bull market.

Bitcoin Liquidations Show Caution

While the market outlook is bullish, traders are approaching the 200-day SMA with caution. Recent data from CoinGlass indicates that around $16.42 million in long positions and $7.12 million in short positions were liquidated in the past 24 hours. These liquidations suggest that traders are exercising caution as Bitcoin nears this key resistance level, opting to minimize their risk as they wait to see how the market reacts.

Despite these liquidations, there is little downward pressure on the market. Bitcoin’s current proximity to the 200-day SMA indicates that traders are awaiting a clear signal before making any bold moves. Should Bitcoin successfully break through this resistance, it could mark the beginning of a fresh bull run, as many investors are eagerly anticipating.

Will Bitcoin Price Surge to $70,000?

The potential for Bitcoin price to surge back to $70,000 largely depends on its ability to break through the 200-day SMA. With institutional interest growing and new Bitcoin ETF options being introduced, the stage is set for a significant price move. However, as with any investment, there are risks involved, and traders should proceed with caution.

Looking ahead, all eyes are on the September 2024 developments. As the market braces for what could be another historic rally, the next few days will be crucial in determining Bitcoin’s trajectory.

In conclusion, while Bitcoin price faces significant resistance at the 200-day SMA, its recent price action and the positive market conditions suggest that a breakout could be imminent. Traders should remain vigilant, as a sustained move above this key level could push Bitcoin back into the $70,000 territory.

Source: CoinPedia