This week has seen Bitcoin slowly move to the negative. As uncertainty continues to flood into crypto markets from legacy markets, the first cryptocurrency in market capital seems to be losing momentum.
Bitcoin is trading at $22,600 as of the writing. There has been a loss of 4% in 24 hours, and 1.2% over seven days.
At $22,800, the cryptocurrency lost its simple moving average (SMA), which was 200 days old. To maintain bullish momentum, it is important to regain this level in the near term.
Bulls need to sustain BTC’s price current levels and push beyond its 200 SMA to prevent the cryptocurrency from re-testing previous support levels. Analyst Caleb Franzen presented the chart below to show how BTC’s price was rejected at a critical level.
This cryptocurrency has reached the highest level of the channel as shown and is now poised to test the lower level at $21,200. To stop a downward trend below $20,000., this level is meant to serve as support.
Material Indicators data shows that there have been over $20,000,000 in buy orders (bid) for Bitcoins between $22,200 and $22,400. The ability to pull back the bears is yet to be determined. However, orders below these levels look thin at $19,000.
As of the writing of this article, $16 Million in Buy Orders at $19,000 are available. This should be enough to protect Bitcoin from further declines. Franzen said the following on BTC’s potential to see further losses in the short term:
It doesn’t matter if you call it a parabolic or curved trendline. Based on what I’ve heard from the analysts who use them, should we be concerned about short-term momentum reversing for Bitcoin? I don’t know (…). The market can fluctuate between extremes in sentiment/trend. (…) I think the magnitude & velocity of this move has been too large.
Bitcoin will be different this time around
Another perspective shows Bitcoin’s current price at $22,300. It is trading close to its 200 week moving average (WMA) of $22,300. Ark Invest’s YassineElmandjra analyst said the cryptocurrency has not lost this level seven times since its creation.
After a significant loss, the cryptocurrency will often return to this point. Elmandjra stated that Bitcoin experiences a 2450% rise when it happens.
BTC could not immediately follow the same trajectory and might experience sideways and bearish price movements. Analyst said:
If this bear market proves to be as bad as 2018, bitcoin may see even more volatility. Bitcoin is down 72% compared to its high. Bitcoin typically finds global bottoms in cyclical cycles with corrections greater than 80%.