Bitcoin has if anything been showing a lot of renewed strength as it breaks important technical downtrends and reclaims key moving averages. This positive momentum coincides with concerns over the Federal Reserve's cautious economic outlook, adding a layer of intrigue to Bitcoin's resurgence.
Bitcoin Breaks Key Downtrends
All this comes as Bitcoin has indicated a significant overall change in momentum. It violated the Daily Relative Strength Index (RSI) downtrend that had been established since November 2024. Still, this breakout may be the first sign of a shift in market sentiment, with buyers starting to get the upper hand.
Bitcoin has broken the Daily RSI Downtrend dating back to November 2024. - Rekt Capital
This breakout out from this downtrend was subsequently confirmed by none other than Rekt Capital, famous crypto analyst. This confirmation adds further power to the signal, indicating that this is not just a temporary blip.
Bitcoin Reclaims Key Moving Averages
In addition to the RSI breakout, Bitcoin has reclaimed two important moving average trend lines: the 200-day simple moving average (SMA) and the 200-day exponential moving average (EMA). These 12-mo moving averages are considered by many market watchers to be lagging indicators of long-term trends.
Bitcoin has most recently Daily Closed above the 200 EMA and in fact is now in the process of retesting it into new support. - Rekt Capital
The 200-day SMA specifically is widely viewed as a key support level during bull markets. Bitcoin’s continued success in retaking this resistance turns out underlying strength to the bulls and lingers as a potential confirmation of the bullish trend continuation. Additionally, with these technical advances, BTC/USD has reclaimed the ground above the $86,000 level.
Economic Uncertainty Fuels Bitcoin's Appeal
All of these recent technical advances for Bitcoin were made during a time of great economic uncertainty. The Federal Reserve’s latest policy meeting was marked by an unusually dovish, or cautious, mood.
Beyond the immediate excitement, the Fed's tone was notably cautious. Policymakers downgraded economy growth projections to 1.7% (a 0.4% reduction), while raising their inflation forecast to 2.8%, signaling a growing risk of stagflation. - QCP Capital
The Fed downgraded its economic growth projections to 1.7%. Simultaneously, it raised the inflation forecast to 2.8%, pointing to a growing risk of stagflation. This backdrop of decelerating growth and increasing inflationary pressure might make Bitcoin an even more attractive option as an alternative place of value.
