- Bitcoin remains stuck under the 200-week Moving Average
- This key trend indicator shows that what in a bull run is support, is now resistance in a bear market
- Until Bitcoin can flip this into support, the bear market will continue
Bitcoin remains stuck under a key moving average, with the rejection from $25,000 being a clear sign that it is not yet ready to reverse any time soon. The 200-week Moving Average (MA) is a great way to illustrate the health of an asset on a longer term timeframe, and Bitcoin has now been beneath it for eight of the last twelve weeks. This is a sure sign that Bitcoin is in the grip of a bear market and will be until it can flip this resistance.
Bitcoin Losing Battle With 200-week MA
Bitcoin has been in a battle with the 200-week MA ever since falling through it in mid-June, with the price action around it very telling:
As we can see, it very clearly rejected at $25,000 and fell right back again. This is the longest spell Bitcoin has ever been below the 200-week MA, with the last time being the March 2020 flash crash.
Even the drop to $3,200 in November 2018 didn’t breach the 200-week MA, and instead used it as a springboard for a huge reversal.
Flip to Support Will Signal Better Times
The situation is clearly different this time around, with the indicator acting as resistance rather than support, which is a first for a Bitcoin bear market. This isn’t necessarily a problem long term, and indeed is more likely to be a result of Bitcoin’s price action becoming less stratospheric with every bull market.
However, those who are currently sitting on the sidelines may as well wait until this moving average has been flipped and turned into support before considering it safe to go back in.