Is Bitcoin’s Final Shakeout Moment Coming? Expert weighs in

by James · April 21, 2023

In January of this year, Bitcoin broke above its 200-day MA for the first time since late 2021. This was a significant milestone for the cryptocurrency, as it had not seen such a signal in over a year. This breakout was a clear indication of Bitcoin’s bullish momentum and the potential for further growth in the future.

In addition, Bitcoin retested the 200-day moving average in March and stayed well above it, demonstrating its robust behavior. However, the leading cryptocurrency is approaching a retest of the lower $28,000 level. Whether Bitcoin will withstand further price decline and continue its bullish trend or whether a final shakeout is imminent.

Bitcoin’s halving cycle and potential dip below the 200-day MA

Recently, there has been speculation that Bitcoin’s price may be poised for a significant rebound come spring. However, as with many things in the crypto world, the situation is not entirely simple.

According to cryptocurrency industry expert Mr. Ben Lily, the current halving cycle is an important factor to consider when evaluating Bitcoin’s price movements. When BTC comes out of halving cycle lows, it usually does not immediately clear the 200-day moving average (MA) and stay above it.

Instead, it tends to come back below the 200-day MA before eventually moving on to form all-time highs. This pattern can be observed in the chart below, which shows the 200-day MA (represented by the dark red line) and the orange circles, which indicate when the price dipped below the 200-day MA.

BTC’s 200dMA breakout behavior. Source: Ben Lily

Furthermore, Lily argues that there is nothing to suggest that the market should expect anything different this time. He believes that a catalyst coming this summer will coincide with Bitcoin’s price falling below its 200-day MA.

FedNow Rollout and Bitcoin: A Tale Of Two Timing

In addition, Ben Lily has provided further analysis of the potential impact of the upcoming rollout of the Federal Reserve’s CBDC, FedNow, on Bitcoin’s price movements. According to Lily, if the rollout happens as planned in July, it could benefit BTC’s price trajectory.

However, Lily notes that in each of the last three halving cycles, Bitcoin’s price fell below its 200-day moving average (MA) between 217 and 315 days before the actual halving. If this pattern holds for the current halving cycle, we can expect BTC’s price to fall below the 200-day MA sometime between June and August.

With FedNow set to roll out in the middle of that period, Lily suggests we can expect the regulator’s “war drum” to be at a fever pitch. This could lead to a final shakeout moment when Bitcoin falls below the 200-day MA, creating a higher low in the market.

At the time of writing, Bitcoin, the largest cryptocurrency by market capitalization, is trading at $28,000, indicating a decline of over 2.5% in the last 24 hours. And, as reported yesterday by NewsBTC, the $27,700 line is key for Bitcoin, as a breakout below this level could signal a shift in market sentiment and potentially lead to a further price decline.