The trading price of Bitcoin (BTC) had been experiencing a downtrend until its value rose as a result of a rally. The trading price of BTC experienced an overnight surge.
Recent Price Surge of Bitcoin
With the recent surge, a new door has opened allowing Bitcoin to reach higher gains in the upcoming days.
The trading price of Bitcoin had hit a low of $22,400 when the bulls formed a rally. They were able to push its price higher with the help of a 4.6% rally, bringing it up to $23.4k.
The data from Binance shows that the price of Bitcoin moved in the reverse direction just when it was about to hit $22,800. The $22.8k price of Bitcoin is the 200-week moving average.
For the bulls, the particular zone was uncertain as they were hesitating to invest in Bitcoin. However, as the trading price of Bitcoin hit its 21-period moving average on the daily chart, it boosted the confidence of the investors.
The movement of Bitcoin increased the optimism of the bulls. This helped them form a strong rally and push the trading price of Bitcoin to its current high value.
Bitcoin’s History Around 200-Week MA
The historical data surrounding Bitcoin shows that it has always recorded strong rallies just when it reaches the 200-week moving average.
If the 200-week MA is not able to help Bitcoin recover and form a strong rally, then it would be an alarming signal. It would suggest that the rally Bitcoin recorded was a short-term relief for the digital asset.
Bitcoin may lose its Fame
It is important to consider that the ‘Merge’ for Ethereum (ETH) will be implemented in September. This means that Ethereum will have fixed the major issues it has been facing since late 2020.
As the demand for cryptocurrencies rose in late 2020, the majority of the blockchain networks faced latency, scalability, and increased fee issues.
As Ethereum was the second-largest cryptocurrency, it recorded a tremendous influx of transactions and trades executed by millions of users.
This led to Ethereum’s demise as it ended up losing its fame and people moved to other blockchain networks that were offering better services.
Since then, Ethereum has been working hard to introduce its own fix, which is in the form of ‘Merge’. The hard fork implementation would fix the scalability, latency, and high fee issues for the blockchain.
The network will move to proof-of-stake from proof-of-work, which may also prove to be a game changer for the network.
After the implementation, it is expected that many investors may leave Bitcoin behind and move to Ethereum. This may also negatively impact the trading price of Bitcoin.