Bitcoin price has no doubt had an interesting couple of weeks. After managing to recover from the crash that rocked the market in June, it is now back down to where it began, losing more than $3,000 in a matter of days. The swift decline has put the digital asset below key technical levels. So while the cryptocurrency had managed to maintain some bullish indicators after falling from $25,000 initially, it has now completely reversed this trend.
Bitcoin has seen a fast fall in its price, which has translated into lower 50-day moving averages for the digital asset. So even when bitcoin had fallen to $23,000 levels, it had been able to maintain above this important point. That is until bitcoin lost its footing at $23,000 and is now trading just above $21,000.
By now, the 50-day moving average for bitcoin had fallen to $21,891, and at a current trading price of $21,433 at the time of this writing, it was trading well below the 50-day MA. The 50-day MA is important for determining when there might be a turn in investor sentiment towards bearish or bullish. As bitcoin has fallen below this point, it indicates that investors are not looking toward buying the digital asset.
Another crucial technical level that bitcoin has lost is the 200-week moving average. Anyone following the digital asset knows that this was a level that bulls fought hard to reclaim. After breaking above it a couple of weeks ago, bitcoin had gone on a positive run that eventually ended at $25,200. Even then, it had managed to hold above here. That is, until Thursday.
The digital asset is down 8.74% in the last 24 hours alone and 10.09% on the weekly chart. This decline has followed the Fed’s hawkish stand in recent times. So basically, the market continues to hold its breath as the Fed makes more decisions concerning the financial markets.
Falling below the 200-week moving average, coupled with the fall below the 50-day MA, bitcoin had now registered another bearish trend. It suggests a reversal to sell-offs, strengthening the bears once more. Trends such as this can only be reversed with accumulations, and even though there is buying among bitcoin holders with 100 to 10,000 BTC, there has not been enough buying to turn the sell-offs around completely.
Presently, bulls are trying to keep the digital asset’s price above $20,000. With the crash, short traders have ramped up as weakness is being perceived across the market. This loss in momentum has continuously dragged the price down, and unless there is significant buying coming from whales and institutional investors, bitcoin is more likely to test $20,000 than touch $25,000 again.
Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…