Bitcoin Trading Strategy As Cryptocurrency Breaks 50 Day Simple Moving Average In Recovery Mode

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Bitcoin (BTC) is trading above its 50-day simple moving average for the first time since May 12. The trading range since May 19 goes from a high of 41,323.05 set on June 15 to a low of 28,800.01 on June 22, down 30.3%. The rise from that low hit its semi-annual pivot of 35,643.29 on June 29. A secondary low of 30,400.00 was set on July 19. From that low, bitcoin is now trading around its 50-day simple moving average at 34,183.35.

If bitcoin can stay above 34,183.35, the rise is in its semi-annual and weekly risk levels at 35,643.29 and 36,863.07. Even with that rise, its weekly chart remains negative given a close on Friday, July 30, below its modified five-week moving average at 36,162.14.

The daily chart for Bitcoin

Daily chart for Bitcoin. Courtesy of Refinitiv Xenith.

Refinitive

Bitcoin has been trading above a golden cross since May 26, 2020, when the 50-day simple moving average, then at 8,322.00 rose above the 200-day simple moving average at 8,052. , 43. Notice how the 50 day SMA was a buy level at 29,252.24 on January 27. The next time the 50-day SMA was tested, it was 50,951.90 on March 25. On April 18, bitcoin closed at 55,550.00, below the 50-day SMA at 56,252.44.

Bitcoin traded below its 200-day SMA at 39,763.27 on May 19. Since then, the trading range has increased from 41,323.06 on June 15 to 28,800.01 on June 22.

The horizontal line at the top of the chart is this month’s risky level at 62,927.95. The horizontal line at the bottom of the graph is the annual value level at 18,892.52, which is the overall downside risk.

The three horizontal lines within the trading range are the weekly risk level at 36,863.07, the half year risk level at 35,643.29 and the quarterly pivot at 32,802.94.

The weekly chart for Bitcoin

Weekly chart for Bitcoin. Courtesy of Refinitiv Xenith.

Refinitive

Bitcoin’s weekly chart is negative but oversold and is below its modified five-week moving average at 36,216.42. That’s well above its 200-week simple moving average or its reversion to the 13,939.59 average.

The last two longer-term buying opportunities occurred during the weeks of March 15, 2020 and the week of August 2. On March 15, Bitcoin tested its 200-day SMA then at 5,540.89. On August 2, bitcoin broke the downtrend line at 10,128.28.

Trading Strategy: Buy bitcoin on weakness up to its quarterly pivot at 32,802.94 and reduce strength holdings to its semi-annual and weekly pivots at 35,643.29 and 36,863.07.

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