Bitcoin prices on Monday are on the move again, this time notching a multimonth high.
The top cryptocurrency by market cap hit its highest level since mid-May and briefly eclipsed the $50,000 mark. Bitcoin hit a high of $50,562 on the day before pulling back about $1,000.
Still, bulls are gobbling up the good news. The rally also sent a jolt into stocks like Coinbase (COIN) and MicroStrategy (MSTR) – Get Report, among others.
Of course, it helps that Coinbase recently bought $500 million of crypto, while PayPal (PYPL) – Get Report unveiled an expansion of cryptocurrency services.
Now that Bitcoin has gone from a recent low just below $30,000 back to $50,000, it begs the question: What happens now?
Daily chart of Bitcoin
Chart courtesy of TrendSpider.com
Bitcoin bottomed in late July and immediately turned higher, ripping off 10 straight daily gains.
Not long after that move, I looked at how Bitcoin could get to $50,000. Now that it's there, we have to reassess.
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After bouncing around on both sid! es of the 200-day moving average, Bitcoin resolved higher, then pushed through the $47,100 level, which was the breakdown spot in May.
I’m watching one more upside level from here, at $51,100. That’s where the 61.8% retracement comes into play.
It would be a big run, but if Bitcoin can maintain momentum, we could see a push into the $58,000 to $60,000 zone. This area has been strong resistance, with only one real push occurring above it, which sent Bitcoin up toward $65,000.
On the downside, bulls should love a dip down toward $45,500 to $47,500. I realize that’s a fairly wide range, but there should be plenty of support in that zone.
It includes the 10-day, 21-day and 200-day moving averages, as well as uptrend support (purple line).
Below all these measures and the $42,000 area is on the table, followed by the 50-day moving average.
I’m not sure how long the rally in Bitcoin will last, but for now it’s riding a nice trend higher.
Let’s not bet against it until support begins to fail. Until then, dips are a buying opportunity.