Bitcoin Price Action: 200-Day SMA Losing Steam
Bitcoin (BTC) is facing some headwinds as the 200-day simple moving average (SMA) appears to be losing its bullish momentum. This key long-term indicator is considered one of the more reliable ways to gauge an asset’s future price action.
The 200-Day SMA’s Role
The 200-day SMA has been a crucial support level for Bitcoin in the past. However, with recent economic data showing a slowdown in job growth, the SMA’s bullish momentum has weakened. Short-term traders are not happy about this, as it suggests that Bitcoin could be headed for a correction.
This is the first time since October 2023 that the 200-day SMA is looking bearish. Bitcoin’s daily price increases have been consistently falling since late August, a concerning trend for many.
Mixed Signals
While the 200-day SMA is losing its bullish momentum, other indicators are also sending mixed signals.
- Short-term moving averages such as the 50-day and 100-day SMA are also trending downwards.
- The Stochastic relative-strength index (RSI) has signaled a trend reversal from bullish to bearish on the Bitcoin 2-month chart.
- Google Trends shows that searches for the word “Bitcoin” have been at their lowest since October 2023.
Bearish Sentiment
Some analysts believe that Bitcoin could see a significant correction, possibly even dropping to below $50,000. This bearish sentiment is fueled by the declining 200-day SMA and other indicators.
Counterpoint
Other market experts are more optimistic, believing that Bitcoin will bottom at $55,000 before the influx of US liquidity helps to reignite buying pressure.
Long-Term Fundamentals
Despite the short-term bearish sentiment, many believe that the long-term fundamentals of Bitcoin remain intact. Institutional interest in Bitcoin is growing, with companies like ZKB offering trading and custody services for its customers.
Bitcoin is still a relatively young asset, and its long-term price trajectory is still unclear. It is important to stay informed about the latest market developments and to make investment decisions based on your own research.
