Bitcoin (Bitcoin) The price fell below the long-term support wave, which helped maintain its strong bullish bias after the crypto market crash in March 2020.
This wave is called the 50-week simple moving average or 50-week SMA, and represents the average price that traders paid for Bitcoin in the past 50 weeks. Over the years, by 2020, its failure as a price floor has caused the Bitcoin market to enter a severe bearish cycle.
For example, the 50-week moving average played a supporting role during the 2018 bear market. Between February 2018 and May 2018, this wave prevented Bitcoin from experiencing a deeper downtrend as its price was corrected from the then record high of $20,000.
Similarly, this wave has provided incredible support for Bitcoin during its pullback from its 2019 high of $15,000. In addition, until March 2020, when the Covid-19 pandemic caused the global market to collapse, it was still a price bottom line.
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Fractal target $12-$13K
An anonymous chart analyst, Bitcoin Master, expressed concern about the possibility that the average price of Bitcoin will fall by 80% after breaking through its 50-day moving average. The analyst pointed out that if the above fractal occurs, the BTC/USD exchange rate may fall to 13,000 US dollars.
#Bitcoin Just marked the 50-week simple moving average, let’s see if the token will break the tradition that it will rebound by at least 50% ($47,000) before ATH drops by 80% ($13,000).
— Bitcoin Master (@drei4u) July 14, 2021
#Bitcoin After the weekly candle opened below the structure I have been observing for several weeks, it fell.
I expect it to rebound between US$24,000 and US$29,000, mainly due to the CME’s gap of US$24,615.
After that, my guess at the bottom of the bear market will be $12,000, or $2,000 per side. pic.twitter.com/aMi2M45bmf
— Keith Walling (@officiallykeith) July 19, 2021
At the same time, Mike McGlong, senior commodity strategist at Bloomberg, also emphasized the 50-week moving average. In a tweet posted in early July, Although recalling the wave’s ability to curb selling pressure. The analyst advises investors not to immediately sell their bitcoin holdings when they initially break the wave.
“Selling bitcoin in the past during the initial decline below the 50-week moving average has proven to be a good way to lose money, even in a bear market,” McGraw explained.
Bitcoin market analysts are mixed
The recent Bitcoin decline occurred after the global risk market decline was due to concerns that the highly spread Delta variant of Covid-19 would slow the recovery brought about by the economic reopening.
Vijay Ayyar, head of business development at cryptocurrency exchange Luno, pointed out that Bitcoin may fall further.in his Comment on Bloomberg, The former Google executive said that the BTC/USD exchange rate may fall to a low of 20,000 US dollars. Nevertheless, he expects that the currency pair will retest the $40,000 in the next rally.
“Before resuming another bull trend, we need to form another foundation,” Ayyar pointed out.
“For the rest of this year, our revenue will be between US$20,000 and US$40,000.”
Jehan Chu, founder of Kenetic Capital, a venture capital and trading company focused on cryptocurrencies, Set a safe downward goal Close to $25,000, but warned that if the bulls fail to rebound from the above level, the selling will accelerate. He says:
“The momentum of the crypto market in the first quarter has stalled and is likely to be further reversed at a level below $25,000.”
Strong fundamentals and bullish signals still exist
However, another analyst offered a different and more optimistic view of the current Bitcoin position.
James Wo, the founder and CEO of Digital Finance Group, a global crypto investment company, emphasized on-chain indicators, including transaction inflows and the continuous decline of active wallet addresses, which are the reasons to remain bullish on Bitcoin.
“Looking at these on-chain indicators, we can say that most investors are waiting for a major signal to enter the market again,” Wo told Cointelegraph.
related: Bitcoin bull market outlines 7 steps for more fiscal stimulus and higher BTC prices
The data provided by CryptoQuant, a South Korean-based blockchain analysis company, also provides a bullish setting for Bitcoin and references the cryptocurrency’s MVRV.
In detail, MVRV represents the ratio of the market value of an asset divided by the realized market value. When the result is too high, traders may interpret the Bitcoin price as overvalued, thereby suggesting selling pressure. On the other hand, when the MVRV value is too low, traders may consider the Bitcoin price to be undervalued, which means buying pressure.
“buy [Bitcoin] The period from January to March 2017 was at the same level in the past cycle,” famous One of the CryptoQuant analysts added:
“It will not sell at the bottom, but prepare ammunition for the bottom. Short-term data provides the possibility of testing support and a good opportunity for exposure.”
The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.
