Bitcoin is struggling to get past its 200-week moving average, more BTC downsides possible

by James · July 18, 2022

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Altcoins put on a solid show last week with Ethereum (ETH) leading the herd and passing $ 1,500 at press time. On the other hand, Bitcoin’s performance remains relatively subdued!

While BTC gained 10% in the last week, BTC continues to face strong resistance at its 200-week moving average. Faced with rejection of its 200-week moving average, BTC is currently trading at $ 22,102 levels.

The damn 200-week moving average continues to be a sticky line for #bitcoin! pic.twitter.com/VnYSTcOcsT

– Lark Davis (@TheCryptoLark) July 19, 2022

If Bitcoin fails to break these levels, we can expect some trend reversal and profit booking very soon. Let us now take a look at what some of the calculations on the chain have to suggest in the future.

Bitcoin On-Chain Metrics

Bitcoin’s current spot price is currently trading below the realized price. Historical trends suggest that this has been the period of accumulation in recent bear cycles. Considering the previous bear cycles, the average time spent below the realized price is 197 days. During the bear market in 2022, we are only 35 days on the clock, Glassnode notes.

On the other hand, Glassnode explains that Bitcoin’s MVRV ration has fallen below 1.0. Low MVRV conditions indicate that the current market price is below the acquisition price for chain investors. Ideally, an MVRV ratio above 1.0 suggests market power. As Glassnode explains:

The MVRV ratio is currently trading at 0.953 (-4.67% unrealized loss), which is not as deep as the average of 0.85 (-15% unrealized loss) seen in previous bear cycles. This may mean additional downside and / or consolidation time is needed to establish a bottom. However, it may also signal that there is a greater degree of investor support in this bear cycle.

Popular crypto-market analyst Lark Davis calls this a bear market rally, and suggests followers leave positions after some recent pumps. In his Twitter post, Davis wrote: «PSA controls your emotions, this is a bear market rally until proven otherwise. Many opportunities to make trades, maybe even go out of some positions, but tread carefully ”.

Bhushan is a FinTech enthusiast and has a good grasp of understanding the financial markets. His interest in economics and finance draws his attention to the new markets for blockchain technology and cryptocurrency. He is continuously in a learning process and stays motivated by sharing his acquired knowledge. In his spare time, he reads thriller novels and sometimes explores his culinary skills.

The content presented may include the author’s personal opinion and is subject to market conditions. Do market research before investing in cryptocurrencies. The author or publication has no responsibility for your personal financial loss.