The month of February was a rocky one for bitcoin however the digital asset had managed to return out forward in the long run. After struggling three lengthy months of crimson closes, bitcoin has lastly recorded its first inexperienced month. That is attributed to the rally that started on the finish of the month. Nevertheless, this isn’t the primary time that the digital asset would mark such a pattern and previous efficiency helps to talk to what will be anticipated from right here from the cryptocurrency.
1st Inexperienced Month Shut For Bitcoin
Since hitting its peak in November, bitcoin has constantly closed the next three months within the crimson. It continued to wrestle on this sample till a late February rally broke and noticed it shut within the inexperienced as soon as extra. This marks the primary inexperienced shut after three crimson closes. It’s important given the traits which were triggered up to now by occurrences resembling this one.
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The latest one-month inexperienced shut after three crimson closes had occurred in July 2021. Now, recalling that in July of final yr, bitcoin had come out of a peak and headed into three months of straggling costs. Nevertheless, after making the July one-month inexperienced candle, the worth of the digital asset had rallied to a brand new excessive following the help of the 1 week MA50.
One other occasion of this was the June 2015 one-month inexperienced candle that fashioned after three consecutive crimson months. What had adopted was what was successfully the underside of the 2014-2015 bear market and the beginning of the following bull rally. The identical was the case with the February 2019 and December 2011 one-month inexperienced candles that fashioned after consecutive crimson months.
Going by this earlier historical past, this might imply that the digital asset is gearing up for one more bull rally. It could be particularly convincing on condition that the worth of bitcoin continues to commerce above the 50 transferring common.
But it surely’s not all good
One fixed factor with bitcoin is the always altering traits. As such, the case of a inexperienced candle following three or extra consecutive crimson months has not all the time spelled a bullish future for the digital asset. Typically it has meant the precise reverse, being the factor that lastly pushes BTC again into one other bear pattern.
BTC closes in inexperienced after three crimson months | Supply: BTCUSD on TradingView.com
This was the case with the October 2019 one-month inexperienced candle that fashioned after three crimson months. The value of the digital asset had dropped to a brand new low following this because the 1 week 50MA had failed to carry because it had achieved earlier instances. The identical was skilled in November 2014 that pushed the asset in the direction of a brand new low after failing to carry the 1W MA50 help. In Could 2014, this occurred once more, reaching a brand new low.
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The frequent incidence for all of this has been bitcoin failing to carry above the 1W MA50. Which means that for bitcoin to begin a bull rally, the worth must maintain above the 1W MA50. Failure to take action could very effectively ship the market in the direction of new lows, which at this level can be a drop under the $30,000 degree.
Featured picture from CoinDesk, chart from TradingView.com