Bitcoin rebounded to as high as $7,400. Can the increase continue?

Bitcoin’s price seems to fluctuate erratically, and as a result, no one can accurately predict the cryptocurrency’s direction during daily trading, especially during the period during which more than $1 billion worth of long positions (and short positions) were liquidated on BitMEX and other trading platforms, leading to the March 12 crash that saw Bitcoin fall to $3,700.

But despite this, data suggests that Bitcoin’s long-term trend is predictable, but one historically accurate indicator suggests that BTC’s recent rally is over for now.

In 2018, when Bitcoin fell to $3,150, analysts were convinced that Bitcoin would continue to fall, and some proposed anchoring the price at $2,000 or even lower. Although this was the consensus at the time, in retrospect, it is clear that the bottom was signaled by an indicator.

That is, the average miner cash flow indicator predicted the profit point for miners, reaching $3,000 in December 2018, and then further confirmed its importance to Bitcoin at the end of 2019, reaching $6,400, which is where Bitcoin bottomed.

Crypto trader ByzGeneral recently said that this level is now acting as resistance, which if it follows historical precedent means that BTC could remain high at this point.

ByzGeneral's Twitter wrote, "Average cash flow from miners has long been support (until Black Thursday), but now it's acting as resistance. Also interesting is that the fundamental indicator can be used well as a technical S/R."

Cryptocurrency trader Yadox explained that the $7,900 to $8,100 area for Bitcoin was “very interesting” on April 7, noting how there was a stunning confluence of resistance that Bitcoin price faced in this area.

He claims that important key technical levels are around $8,000, which include the annual volume-weighted average price, the 200-day exponential moving average, the 21-week moving average, the Fibonacci retracement "golden section," the downtrend line, and the top of the ascending channel.

Regardless, analysts remain convinced that Bitcoin’s long-term trend is shaping up to be decisively positive.

Digital asset manager Charlie Edwards’ indicator estimates that Bitcoin is now trading below its mining cost 25 days from the halving. The last time this trend occurred was in 2016, when Bitcoin rose 2,700% to $20,000 in the following 18 months.

Furthermore, the simple fact of the upcoming Bitcoin halving already suggests a lot of long-term upside, as a price model from well-known cryptocurrency analyst PlanB finds that BTC’s price can be accurately reflected in its scarcity, or more precisely, its stock-to-flow ratio.

The original article comes from bitcoinist and was translated by the BluemountainLabs team. The English copyright belongs to the original author. Please contact the translator for Chinese reprint.