Despite what has been a mediocre performance over the past week, bitcoin’s price (BTC/USD) finds itself today back above its 50-day moving average.
In continuing the theme of highly flat trade from earlier this month, it has not deviated from its midpoint by more than 0.75% during the past 24 hours. The two periods of stability were interrupted by a jump of 20% last weekend, followed by a loss of nearly all gains in less than twelve hours.
BTC/USD has climbed steadily since falling to near $220 on BTC-e, gaining roughly 7% during the past five days to $238. Despite remaining unchanged during the past 24 hours, it has again surpassed its 50-day moving average (MA), which at $233, is still feeling the after effects of the heavy losses in early January.
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The 50-day MA has not risen significantly since last June, when prices were as high as $670.
The increasingly frequent straddling of the MA this month is another indicator of a possible bottoming process, to be in force for at least the intermediate term. Essentially, the rate of decline has slowed in comparison to its recent history. In addition, prices have been fending off the $210 support area with increasing success.
If a mid-term bottoming is indeed occurring, it would reinforce theories that a major part of the January plunge to $162 was motivated by margin calls, panicked traders and other behavior indicative of oversold conditions.
The chances of a bottoming are greater if the gains continue to come in gradually and are preserved for longer than those of last weekend.