As a seasoned crypto investor with a front-row seat to the wild rollercoaster ride that is Bitcoin, I can’t help but feel a familiar sense of déjà vu as I watch this latest downturn unfold. The 200-day SMA, once a beacon of hope, now seems to be losing its bullish momentum, mirroring the weakening economic recovery in the US.
In simpler terms, the trend that’s often used to predict Bitcoin‘s long-term price movement, known as the 200-day Simple Moving Average (SMA), seems to be weakening its upward push, possibly due to the US economy creating fewer jobs in August 2024.
Bitcoin Must Overcome The 200-Day SMA To Reverse Trend
In simpler terms, the 200-day Simple Moving Average (SMA) is a popular and dependable tool for predicting an asset’s future price trends over a longer period. At the moment, Bitcoin’s 200-day SMA suggests a decrease in its strong upward trend, which might not bring much satisfaction to short-term traders.
Significantly, it appears that the Simple Moving Average (SMA) of 200 days could shift into a downtrend for the first time since October 2023. From late August onwards, the daily average price increase of Bitcoin has not exceeded $50, contrasting with its regular daily gains of over $200 during the first half of 2024.
Currently, the Simple Moving Average (SMA) for a period of 200 days is approximately $63,840, which represents an increase of around 13.96% compared to the present Bitcoin price of $56,840.
As an analyst, I find it noteworthy to mention that the short-term moving average indicators like the 50-day Simple Moving Average (SMA) and the 100-day SMA have already peaked and are currently trending downward. Recently, a bearish signal emerged as the 100-day SMA dropped beneath the 200-day SMA.
Based on the analysis of cryptocurrency expert Ali Martinez, the Stochastic RSI (Relative Strength Index) suggests that the bullish trend in Bitcoin, as seen over the past two months, might be turning bearish. Historically, such a shift has often resulted in a substantial correction, potentially reaching up to 75.50%.
Furthermore, it’s worth noting that interest in the term “Bitcoin” has dropped to its minimum levels since October 2023, a period when Bitcoin (BTC) was trading at approximately $30,000.
Enhancing the general pessimistic outlook about the primary digital currency, the former CEO of BitMEX cryptocurrency exchange, Arthur Hayes, recently stated on social media that he is currently betting against Bitcoin and anticipates its value could plummet to below $50,000 in the coming weekend.
On the contrary, some market analysts believe that the price of Bitcoin might fall as low as $55,000 before an increase in U.S. liquidity revitalizes the weak demand for cryptocurrencies, which is currently insufficient to drive up prices.
Bitcoin’s Fundamentals Remain Intact
Despite some crypto experts predicting a downward trend in Bitcoin’s immediate pricing, their long-term optimism about Bitcoin as a leading digital currency stays consistent.
According to crypto expert Crypto Jelle, the relatively calm increase in Bitcoin’s price over the summer may end around early October. After this potential conclusion, there is a possibility that Bitcoin will continue to surge upward again.
The increasing enthusiasm towards Bitcoin is evident, with the latest move by Swiss bank ZKB, offering Bitcoin and Ethereum trading and safekeeping facilities to their clients. Currently, a single Bitcoin is valued at approximately $56,018.
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2024-09-07 01:16