While February was not a good month for bitcoin it did manage to rebound at the end. Bitcoin finally achieved its first ever green month after three months of long red closings. It is due to the rallies that started at the beginning of the month. This isn’t the first time the digital asset has seen such a trend. Past performance can help us to predict what we can expect from cryptocurrency.
Bitcoin: 1st green month close
Bitcoin has closed in the red every month since November when it reached its peak. The trend continued until late February, when bitcoin finally broke out of the red and closed in green. After three closes in red, this marks the first close to green. The significance of this close is due to the historical trends, which were triggered by events such as these.
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In July 2021, bitcoin’s most recent one month green close occurred after three consecutive red closes. Recall that last July, bitcoin was at its highest point and heading for three months of volatility. The support of the MA50 for one week had helped bitcoin’s price to rise after the green candle of July.
The June 2015 one month green candle formed after three consecutive months of red. This was the end of the bear market of 2014-2015 and the beginning of the next bull run. Similar was true for the December 2011 and February 2019 one-month green candles, which formed following consecutive red months.
Based on the past, it could be that this digital asset is poised for another bull rally. This would be particularly convincing considering that bitcoin’s price continues to rise above its 50-day moving average.
But It’s Not All Good
Bitcoin’s constant changeable trends is one thing that remains constant. The case where a green candle appears after three consecutive red months is not necessarily a sign of a bullish outlook for bitcoin. Sometimes, it’s been exactly the opposite. It can be the catalyst that pushes BTC into yet another bear trend.
BTC ends in green, after three months of red | Source: BTCUSD on TradingView.com
The October 2019 one month green candle formed following three months of red. This caused the price drop to new lows as the 1W MA50 support failed to hold, as it did in previous years. In November 2014, it was the same thing that drove the asset to new lows after the asset lost support for the 1W MA50. This happened again in May 2014. It reached a new low.
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All of these events have led to bitcoin falling below the 1W MA50. To start a bull run, bitcoin must hold above 1W MA50. The market may fall to $30,000 if it fails to meet this requirement.
Featured Image from CoinDesk. Chart from TradingView.com