- Bitcoin closed above a crucial resistance area Wednesday.
- The ceiling was instrumental in beginning a new bull run back in 2019, wherein the price surged by 239%.
- Traders’ optimism for bitcoin has peaked ahead of its mining reward halving in May 2020.
Bitcoin resumed its winning streak Wednesday as its price edged further closer towards $8,000.
The bitcoin-to-dollar exchange rate rose 1.53 percent to $7,878 a token, a move that brought the pair above its 20-weekly exponential moving average. The price curve was instrumental in sending bitcoin up by 239 percent back in 2019 – from $4,051 to $13,868 on Coinbase.
A break above the 20-WMA in January 2020 also led the prices up by 28.62 percent to above $10,000. Nevertheless, bitcoin failed to extend the rally as the coronavirus-induced fears led investors to panic-sell their crypto positions in March 2020.
But the cryptocurrency’s break above the 20-WMA this time comes ahead of its mining reward halving. The event would reduce bitcoin’s daily supply output from 1,800 BTC to 900 BTC. The last two halvings resulted in exponential price rallies. Traders anticipate the third event would lead to a bitcoin price boom.
“We are now two weeks from the anticipated BTC halving, and levels of discussion have expectedly risen with the price,” wrote crypto researcher Santiment. “Interest levels [on social media] are mostly correlating with positive momentum, meaning crowd consensus is widely optimistic about this.”
Breaking above 20-WMA not always resulted in exponential price gains. In 2018, when bitcoin was undergoing one of its longest bearish corrections,