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Is the bottom in? Since Bitcoin (BTC) fell precipitously to $6,600 late last month, analysts have been asking if the leading cryptocurrency has finally found a price bottom after a multi-month downturn.
Related Reading: Eat My Shorts: Everything You Need To Know About The Bitcoin Bart Pattern
Analysts have understandably divided over the question, as the correct answer would show in which direction Bitcoin will head for the next couple of months. Some are bullish, others are bearish.
A simple moving average observation has made a cryptocurrency trader conclude that the “bottom is probably not that far away.” Here’s why.
Bitcoin Bottom Near, Moving Average Implies
While Bitcoin seems unpredictable most of the time, the cryptocurrency has historical patterns, signs that show when certain price action is to be expected. One of these patterns is that when BTC is trading under its two-year moving average, it signals that Bitcoin is in a long-term buying zone.
Trader Byzantine General recently noted that BTC is currently trading below its two-year moving average, which he claims implies that BTC is in oversold territory, thus meaning that the “bottom is probably not that far away.”
Indeed, as the chart he posted alongside his comment shows, every time Bitcoin crossed under this key level, it bottomed shortly afterward, before breaking higher.
https://twitter.com/ByzGeneral/status/1208458036139954176
Related Reading: Halving Priced In or Not, Bitcoin’s Trajectory Bullish for 2020: Exec
Other Technical Factors Corroborate This
The two-year moving average isn’t the only technical signal implying the bottom is near, if not here already.
Per previous reports from this outlet, on-chain market intelligence firm Glassnode recently observed that there is a confluence of factors suggesting that the Bitcoin bottom is forming, if not here already.
They first noted that the Market Value to Realized Value (MVRV), the ratio between market cap and realized cap, is “consolidating towards one,” which implies that gains are being realized by Bitcoin investors. A reading of “one” of the ratio often marks a bottom for the cryptocurrency market.
There’s also Willy Woo, partner of Adaptive Capital, who recently remarked that on-chain momentum is “crossing into bullish” territory after a multi-month downturn. With this in mind, he asserted that the “bottom is most likely in,” meaning that any move lower than the $6,500 plunge “will be just a wick in the macro view.”
On-chain momentum is crossing into bullish. Prep for halvening front running here on in. Can't say what this indicator is, as it's proprietary to @AdaptiveFund, but it tracks investor momentum. The bottom is mostly likely in, anything lower will be just a wick in the macro view. pic.twitter.com/WqiPRpweUv
— Willy Woo (@woonomic) December 7, 2019
Related Reading: Bloomberg Analyst: Bitcoin More Likely to Hit $10,000 Than Fall 30%
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