On Sunday, the 13th of June 2021 Bitcoin has increased about 10% in price in relation to the US dollar, touching $40,000. The Taproot update was locked in by miners which sends a very positive signal that the network will be upgraded to add privacy features and smart contracts.
This is most likely the main reason for the sudden price increase and the bullish momentum.
Some attribute the price increase to new tweets by Elon Musk that Tesla will resume to accept Bitcoin, as soon as mining becomes greener. Although this may be viewed as slightly more positive news than a broken Bitcoin heart emoji he posted recently, it did not have the power to move the market by 10%.
Too many Twitter and Reddit followers think that Elon Musk has the power to move the Bitcoin market. Sure, officially accepting Bitcoin by Tesla is bullish news for Bitcoin but some random personal tweets do not add or subtract anything of major importance.
The image above shows the Daily chart of BTCUSD. The price hovers below the 200 Moving Average. The black line shows the 50 MA which is getting closer to the 200 MA and many traders are anticipating the upcoming Death Cross.
The Death Cross happens when the 50 MA crosses below the 200 MA on a Daily chart. Usually this type of cross indicates the beginning of a bearish market, but of course this is not always true.
If the Bitcoin price crossed above the 200 MA and the 50 MA on the Daily chart, it would completely change the momentum to very bullish. This is also possible, especially if more countries announce that they are looking to adopt Bitcoin as legal tender, as did El Salvador recently.
Let’s have a look at the Weekly chart of BTCUSD with the same Moving Averages of 21, 50, and 200.
The Weekly chart shows a different view. Here we can see that Bitcoin is consolidating right above the 50 Moving Average and it has not crossed it yet. The 200 MA is still far below the actual Bitcoin price leaving it somewhat exposed to the possible lows of $15,000. On the Weekly chart there is currently no suggestion of the 50 MA crossing below the 200 MA.
This Bitcoin price analysis looks at long term outlook, hence the use of Daily and Weekly charts.