Bitcoin (BTC) might move higher in coming weeks due to two major daily moving averages heading for a collision. This occurs when a short-term moving average (MA) crosses above a longer-term one, usually the 50-day and 200-day MAs.
The last time this happened was in April 2019. The top cryptocurrency’s price surged 175 percent at a yearly high at around $13,880.
If the historical feat happens again, BTC could witness a short-term drop before reaching 2020 highs.
Daily charts expect strong buying pressure for the coin as it sees a 175 percent increase in comparison to 2019. Further, the coin is up 43.5 percent since the beginning of the year.
The golden cross, however, will require positive follow-through or Bitcoin will more likely see a deeper pullback.
The 14-day relative strength index supports the potential of short-term losses. The indicator sees overbought conditions at 67.2, with 70 as the representative of overbought.
Yesterday’s bearish candle brought up the possibility of another increase to $10,000. The fall could extend if prices fall below its psychological resistance to $9,867.
For the weekly chart, price action is still bullish since its breakout on January 20, which began in July. The 50-period MA on the weekly chart shows bullish momentum, hinting greater buying power ahead of May’s halving event.
Mid-term bullish views will change if Bitcoin drops its price below $9,706, similar to the bullish candle on February 11.
Trump Worries About Iranian Crypto Regulation
Amid the cryptocurrency mining crisis from halting upgrade manufacturing in China, Iran turns its attention to mining. The Parliament of Iran Research Center suggested mining licenses to generate new tax revenue and bureaucratic fees through regulation.
A related proposal from the same organization claimed this could bring the government upwards of $1 billion in annual revenue. The domestic cryptocurrency mining industry is valued at $8.5 billion.
The same report also recommends allocating a portion of its government’s 2021 budget to the cause. Although, details of that proposal remain unseen.
If approved, Bitcoin could save the Islamic Republic from caving into America’s call for submission.
The US President Donald Trump expressed “growing concern” of this technology earlier this week following the US Treasury’s warning. He claims the Iranian government can use the technology to evade American sanctions on countries like theirs.
Last year, various US government agencies spend $5 million on research for blockchain. Treasury Secretary Steven Mnuchin referred to Facebook’s proposed Libra stablecoin as a national security issue from terror financing and laundering.