Bitcoin bulls may win big as two key moving averages prepare to cross
Bitcoin (BTC) lost a key bear market trendline last week as it shed almost 12%, but other chart data offers a silver lining for bulls.
As noted by popular Twitter user Dave the wave on Aug. 24, long-term moving averages (MAs) are about to repeat classic bullish behavior.
BTC/USD disappointed over the weekend as it put in lows not seen since the end of July. Since then, $21,000 has offered only weak support, and fears abound that new lows are coming.
One of the casualties of the downturn was the 200-week MA, data from Cointelegraph Markets Pro and TradingView shows, a level which had flipped from resistance to support the month prior.
Now back overhead and unchallenged by rebounds this week, the 200-week MA offers a verdict on the current lack of strength in Bitcoin.
“The amount of FOMO we saw on CT in the past 2 weeks during the $25k rally is unprecedented. This bulltrap almost has to play out,” analyst Venturefounder summarized after the 200-week MA failed as support.
Observing the behavior of the 50-week and 100-week MAs, however, suggests that all might not be lost.
In his Twitter thread, Dave the wave showed that the former is about to cross over the latter — and in the past, this has been followed by sustained price growth.
“Bitcoin 1 year moving average now crossing the 2 year moving average as per the corrective phase after a speculative run-up,” he wrote in accompanying comments.
He added that five months prior, the same pair of MAs had correctly assessed the incoming market downtrend which saw BTC/USD hit a macro bottom of $17,600 in June.
As Cointelegraph reported, there is more than one moving average-based chart mechanism flashing a bottom signal this summer.
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