600 days MA is starting to crumble
Charts show that Bitcoin price appears to be falling below the 600-day moving average, a sign that could be bearish for the crypto.
Bitcoin begins to lose 600-day MA support line as price dips below $39k again
As noted by an analyst in a CryptoQuant afterThe crypto’s price now crosses below the 600-day MA curve, a line that has served as support for BTC in the past.
A “moving average” (or MA for short) is an analytical tool that averages a quantity over a period of time. As the name suggests, this average is constantly updated as time goes by and new values come in.
What this tool does is it removes all short-term fluctuations from the chart being studied (which in this context is Bitcoin price), smoothing out the curve.
This makes moving averages very useful for studying long-term trends, where local variations are not so important.
Related literature | Will Bitcoin See Another Big Drop Soon? Historical trend can say yes
MAs can be carried over any range, whether that be two days, two hundred days, or even just two minutes.
Here is a chart showing the trend in the 600-day MA version of Bitcoin price:
It looks like the price curve is now diving below the 600-day MA line | Source: CryptoQuant
As you can see in the chart above, the Bitcoin 600-day MA curve has supported the price of the coin many times in the year so far.
However, the latest trend seems to indicate that this support line is now breaking down as the price line moves below the MA on the daily timeframe.
Related literature | Time vs. Price: Why This Bitcoin Correction Was the Most Painful Yet?
Though the breakdown may not be fully confirmed yet. The figure in the post believes that if the breakdown here fails, Bitcoin could then use the level as a springboard to push higher.
In the event that the breakdown holds, there could be a bearish outcome for the cryptocurrency.
At the time of writing, Bitcoin price is hovering around $38.8k, down 1% over the past seven days. Over the past month, the crypto has fallen 12% in value.
The chart below shows the trend in the price of the coin over the past five days.
It seems that the price of the coin has fallen in recent days | Source: BTCUSD on TradingView
Bitcoin appeared to have been on the path of recovery just a few days ago when the coin broke above $42k.
However, the cryptocurrency now appears to have fallen back down as it revisits the sub-39k levels.
Featured image from Unsplash.com, Charts from TradingView.com, CryptoQuant.com