Late last month, Bitcoin (BTC) saw a jaw-dropping trading session, with the cryptocurrency’s price gaining 42% in a 24-hour time frame; this was BTC’s best daily performance in over six years. This move, which brought the asset from $7,300 to $10,500, shocked many, with many seeing the surge as entirely non-sensical.
Related Reading: Bitcoin Twitter Engagement Tumbles to Two Year Lows as Sentiment Turns Bearish
Though, retrospective analysis has shown that $7,300 was the price of the 200-day moving average on the CME futures market at that time, making the 42% bounce extremely peculiar.
While there is no guarantee a bounce will happen again, Bitcoin is yet again knocking on the door of the 200-day moving average on the CME’s chart. What do analysts expect to happen this time around?
Bitcoin Taps Key Level; What’s Next?
For those unaware, the 200-day moving average of any asset is seen by technical analysts as a level indicative of macro trends; trading above the level implies a macro bull trend, trading below the level implies a macro bear trend. As this excerpt from an Investopedia entry reads:
The 200-day simple moving average (SMA) is considered a key indicator by traders and market analysts for determining the overall long-term market trend… As long as a stock’s price remains above the 200 SMA on the daily time frame, the stock is generally considered to be in an overall uptrend.
As pointed out by analyst Mexbt and as mentioned earlier, Bitcoin tapped the 200-day moving average on the CME. This time, this price hasn’t reacted, with BTC flatlining just a smidgen above $8,000.
Bitcoin retesting the 200 day MA on CME ? pic.twitter.com/BErgRIA0Dd
— mexbt (@mexbt24) November 20, 2019
While a 42% rally off the 200-day moving average is highly improbable, there are some signs that bulls may be ready to take over the cryptocurrency market yet again.
Per previous reports from NewsBTC, the Tom Demark Sequential indicator, which uses time and prices to determine trends and reversal points, has just printed two “buy nine” candles on the CME and Grayscale’s Bitcoin Trust charts. Also, just today, the actual spot BTC chart just printed a buy nine.
That’s far from the end of the bull narrative. Trader Coiner Yadox recently noted that Bitcoin’s price action from the long-term bottom of $3,150 established in December of 2018 until now looks much like a textbook Richard Wyckoff pattern, which is marked by a strong surge upward after a bear market, a double-top pattern, an accumulation throwback, and then a bullish continuation after a bullish breakout.
Yadox suggested that should his interpretation of this Wyckoff pattern be correct, Bitcoin found a medium-term bottom at $7,400, and will soon see a strong breakout to the upside.
Capitulation Has Taken Place
Sure, the aforementioned is all well and good, though a key bear signal just appeared. The signal in question, the Hash Ribbons crossing bearish. As this outlet explained in a recent report, this signal implies that miners are capitulating, selling their coins to keep the lights on, cash out, or to upgrade their systems for the future.
The Hash Ribbons inverted literal days before Bitcoin began its 50% decline from $6,000 to $3,000. Also, this signal was seen just days before a 30% drop in 2016.
Related Reading: Bitcoin Visits Critical Long-Term Trendline; Break Below Could Lead to Massive Losses
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