Bitcoin bulls could win big as two key moving averages prepare to cross
Bitcoin (BTC) lost a key trend line in the bear market last week when it fell nearly 12%, but other chart data is giving bulls a good run.
As noted by popular Twitter user Dave the wave on August 24, the long-term moving averages (MAs) are about to repeat classic bullish behavior.
Analyst: Bulls may be about to ‘do well’
BTC/USD disappointed over the weekend as it hit lows not seen since late July. Since then, $21,000 has provided only weak support, and fears abound that new lows are coming.
One of the casualties of the downturn was the 200-week moving average (MA), data from Cointelegraph Markets Pro and TradingView show, a level that had turned from resistance to support the previous month.
Now back overhead and unchallenged by returns 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 last 2 weeks during the $25k rally is unprecedented. This trap almost needs to come out,” analyst Venturefounder in summary after the 200-week MA failed as support.
However, observing the behavior of the 50-week and 100-week MAs suggests that all may not be lost.
In his Twitter thread, Dave the wave showed that the former is about to cross the latter – and in the past this has been followed by sustained price growth.
“Bitcoin 1-year moving average is now crossing the 2-year moving average according to the corrective phase after a speculative run-up,” he wrote in accompanying comments:
“Looks good from a technical perspective… whatever the feel. Those who buy these levels have done well in the past.”
He added that five months earlier, the same pair of MAs had correctly assessed the incoming market decline that saw BTC/USD hit a macro bottom of $17,600 in June.
Following on the Pi Cycle bottom
As Cointelegraph reported, there is more than one charting mechanism based on moving averages flashing a bottom signal this summer.
Related: Here’s Why Holding $20.8K Will Be Crucial In This Week’s $1B Bitcoin Options Expiration
The classic Pi Cycle Top indicator, which has captured macro bottoms throughout Bitcoin’s history, already turned green in July, lending weight to the idea that June’s $17,600 was indeed a multi-year floor.
However, in an update on Pi this week, commentator Miles Johal acknowledged that bulls needed to clear higher levels to keep the status quo favorable.
Large expansion of the pi-cycle top MAs.
Getting back above the orange line is crucial for the bulls.$BTC pic.twitter.com/REiSHrLSqG
— Miles J Creative (@JohalMiles) 23 August 2022
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