2 Key Technical Reasons Why a Bitcoin Rally to at Least $8K Is Likely

The Bitcoin (BTC) price has seen a strong rebound from $6,800 to $7,600 within a four-day span, recording a 12% increase. Two technical factors are likely to push BTC to $8,000 in the near-term as traders anticipate a strong weekly close.

In the upcoming days, the 200-day simple moving average (SMA) found at just over $8,000 and an ascending triangle forming could push the Bitcoin price to the $7,900 to $8,000 range in the short-term.

200-day SMA and Ascending Triangles are Strong Technical Indicators For Bitcoin

The 200-day SMA, also used frequently by stock traders, is typically used to determine long-term market trends in an asset or an index.

If the price of an asset, in this case of Bitcoin, remains above the 200-day SMA, it is considered to be in a bullish trend. However, if it consolidates below the level, it signals that the asset is in a bear market.

Bitcoin daily chart with SMA over it. Source: Tradingview

Ever since “Black Thursday” occurred on March 12 when the Bitcoin price dropped to as low as $3,600, BTC has remained below the 200-day SMA resistance level. It suggests that technically, Bitcoin is still in a bearish trend and a rejection from $8,000 would confirm that.

But, the Bitcoin price is portraying signs of a further rally up to $8,000, backed by the formation of an ascending triangle at a relatively low time frame.

According to cryptocurrency trader Scott Melker’s technical analysis, the 4-hour chart of Bitcoin is forming an ascending triangle. When supported with a gradually increasing volume and open interest in the futures market, ascending triangles can lead to additional upside movement in the short-term.

Ascending triangle forms in a 4-hour chart of Bitcoin

Ascending triangle forms in a 4-hour chart of Bitcoin. Source: Scott Melker

Low time frames indicating another minor rally for Bitcoin in the imminent-term and the 200-day SMA present at $8,000 show that the probability of BTC grinding upwards in the upcoming days remains high.

On major spot exchanges like Coinbase, there exists a cluster…

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