The cryptocurrency market has always been a subject of intense analysis and speculation, and one of the most critical tools employed by analysts is the moving average (MA). An analyst recently highlighted how a specific MA, which has historically acted as a boundary for bear markets, sits at a pivotal level for Bitcoin.
Bitcoin 50-Week MA Is Currently At $75,195
In a new post on X, analyst James Van Straten shared insights into significant moving averages relating to Bitcoin. A moving average is a technical analysis tool that calculates the average price of an asset over a designated period, adjusting its value as time progresses.
Moving averages can be computed over varying time frames—from mere minutes to several years. Their principal usage lies in studying long-term trends, as they help eliminate short-term fluctuations in price data.
The chart shared by the analyst illustrates the trends of the 50-week and 200-day moving averages of Bitcoin’s price over the past year:
The chart indicates that Bitcoin’s price has dipped below the 200-day moving average following a recent market downturn, suggesting that the asset is currently priced lower than its average for the last 200 days. In technical analysis, the 200-day MA is often viewed as a demarcation line between bearish and bullish trends. A decline below this level is typically interpreted as a bearish signal, indicating that BTC has indeed lost a critical support level amidst its latest price drop.
However, the 50-week moving average may serve as another key boundary reflecting macro trends. According to Van Straten, remaining above this MA is crucial, as a drop below it signifies a bear market. Presently, this level stands at approximately $75,195.
If Bitcoin’s current bearish trend persists, it is likely that this key level will be tested. Nevertheless, the analyst noted that Bitcoin has previously fallen below the 200-day MA on several occasions, only to recover before breaching the 50-week MA. It remains to be seen whether a similar trend will emerge in the ongoing market conditions.
In related news, the ongoing downturn in the market has triggered a leverage flush within the derivatives sector. CryptoQuant author Axel Adler Jr. shared this insight in a post on X.
Adler’s chart presents the data concerning the Open Interest, an important indicator that measures the total number of derivatives positions tied to Bitcoin that remain open across all centralized exchanges. The data shows a significant decline, with Bitcoin’s open interest falling by $668 million and Ethereum’s by $700 million.
BTC Price
Despite the market challenges, Bitcoin has shown signs of recovery in recent hours, with its price surging by 7% to reach the $83,000 mark.
