A weekly close much below current levels would be a problem, analysis warns, as key moving averages hang in the balance.
Bitcoin (BTC) needs to retain two key moving averages in order to stay bullish, but is failing, fresh analysis shows.
In its latest market update on Sept. 10, trading platform Decentrader warned that bulls do not have the upper hand much above current price levels.
A “golden cross” like any other?
Bitcoin has drifted lower into the weekend, at the time of writing sitting near $45,500. This is below the significant 200-day moving average (MA) and barely above the 50-day MA.
For Decentrader’s Filbfilb, these would need to be reclaimed in order to fuel continuation of the bull run.
“For Bitcoin to remain bullish, these two moving averages will need to be maintained, with any price action lower being intraweek – a weekly close below the 50 DMA would not be attractive, particularly if the 20 Week moving average is also lost (yellow line currently around $42k),” he summarized.
The 50 and 200 DMA were on the way to printing a “golden cross,” traditionally a bullish signal, but this week’s dramatic sell-off may yet derail the process.
“The selloff came amidst a pending ‘Golden Cross’ where the 50 DMA crosses above the 200 DMA,” Filbfilb continued.
“This is often seen as being a very bullish sign for the market and typically for Bitcoin, we see dumps into ‘Golden Crosses’ and pumps into ‘Death Crosses’, So on this basis alone, the pullback wasn’t too much of a surprise.”
Should bulls need more impetus to enter, $38,000 — the site of the 61.8% Fibonacci retracement level from $64,500 all-time highs — may yet provide the ultimate line in the sand in the case of a more intense BTC price correction.