Bitcoin bulls could win big as two key moving averages prepare to cross

by · August 24, 2022

Bitcoin (BTC) lost a key trend line in the bear market last week when it fell nearly 12%, but other chart data is giving bulls a good run.

As noted by popular Twitter user Dave the wave on August 24, the long-term moving averages (MAs) are about to repeat classic bullish behavior.

Analyst: Bulls may be about to ‘do well’

BTC/USD disappointed over the weekend as it hit lows not seen since late July. Since then, $21,000 has provided only weak support, and fears abound that new lows are coming.

One of the casualties of the downturn was the 200-week moving average (MA), data from Cointelegraph Markets Pro and TradingView show, a level that had turned from resistance to support the previous month.

Now back overhead and unchallenged by returns this week, the 200-week MA offers a verdict on the current lack of strength in Bitcoin.

“The amount of FOMO we saw on CT in the last 2 weeks during the $25k rally is unprecedented. This trap almost needs to come out,” analyst Venturefounder in summary after the 200-week MA failed as support.

However, observing the behavior of the 50-week and 100-week MAs suggests that all may not be lost.

In his Twitter thread, Dave the wave showed that the former is about to cross the latter – and in the past this has been followed by sustained price growth.

“Bitcoin 1-year moving average is now crossing the 2-year moving average according to the corrective phase after a speculative run-up,” he wrote in accompanying comments:

“Looks good from a technical perspective… whatever the feel. Those who buy these levels have done well in the past.”

BTC/USD Annotated Chart. Source: Dave the wave/ Twitter

He added that five months earlier, the same pair of MAs had correctly assessed the incoming market decline that saw BTC/USD hit a macro bottom of $17,600 in June.

BTC/USD 1-week candlestick chart (bit stamp) with 50, 100, 200 week MA. Source: TradingView

Following on the Pi Cycle bottom

As Cointelegraph reported, there is more than one charting mechanism based on moving averages flashing a bottom signal this summer.

Related: Here’s Why Holding $20.8K Will Be Crucial In This Week’s $1B Bitcoin Options Expiration

The classic Pi Cycle Top indicator, which has captured macro bottoms throughout Bitcoin’s history, already turned green in July, lending weight to the idea that June’s $17,600 was indeed a multi-year floor.

However, in an update on Pi this week, commentator Miles Johal acknowledged that bulls needed to clear higher levels to keep the status quo favorable.

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