The charts show that the price of Bitcoin appears to be dropping below the 600-day moving average, which is a potentially bearish signal for the cryptocurrency.
Bitcoin starts losing the 600-day moving average support line as prices dip below $39,000 again
As pointed out by an analyst at CryptoQuant mailNow, the cryptocurrency price is crossing the 600-day moving average curve, a line that served as support for BTC in the past.
a “moving average“(or MA for short) is an analytical tool that takes the average of any quantity over a given period of time. As the name already suggests, this average is constantly updating itself with the passage of time and the arrival of new values.
What this tool does is it removes any short-term fluctuations from the chart under study (which is the price of bitcoin in this context), and smooths the curve.
This makes moving averages very useful for studying long-term trends, where local differences are not important.
Moving averages can be obtained on any possible range, be it two days, two hundred days, or even just two minutes.
Now, here’s a chart showing the trend in 600 days A copy of the bitcoin price:
Looks like the price curve is dipping below the 600-day MA line now | Source: CryptoQuant
As you can see in the above chart, Bitcoin’s 600-day moving average curve has acted as a support for the coin’s price several times in the year so far.
However, the recent trend seems to indicate that this support line is now breaking as the price line crosses below the moving average on the daily time frame.
Related reading | Time vs. Price: Why This Bitcoin Correction Was the Most Painful So Far
Though, the collapse may not be fully confirmed. Quantum in the post believes that if the breakdown here fails, Bitcoin could use the level as a starting point for a rally.
If the crash continues, the bearish outcome may be in the cryptocurrency store.
At the time of writing this report, Bitcoin price It is floating around $38.8K, down 1% in the past seven days. Over the past month, the cryptocurrency has lost 12% of its value.
The chart below shows the currency price trend over the past five days.
Looks like the price of the coin has plunged down over the last few days | Source: BTCUSD on TradingView
It briefly appeared that Bitcoin was on the road to recovery just a few days ago as the coin broke above the $42,000 mark.
However, it now appears that the cryptocurrency has pulled back once again as it is back at sub-39K levels.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com