Bitcoin price manages to stay above $20,000, but analysts warn of further downside ahead
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(Kitco News) – It was another day of underwhelming activity in the crypto market as prices traded unevenly in the absence of any major developments, which is typical of crypto winters.
Data from TradingView shows that several attempts by bears to hammer the price of Bitcoin (BTC) below $20,000 were well defended by bulls, who quickly bid the price back up into the $20,200 range.
BTC/USD 4-hour chart. Source: TradingView
This behavior is largely consistent with the analysis provided by Senior Kitco market analyst Jim Wyckoff, who noted in his morning Bitcoin brief that “Bulls this week have stabilized prices and they remain in a pause, or sideways, mode.”
While they have managed to sustain the Bitcoin price above $20,000, Wyckoff warned that “Bulls need to show more strength to break the price decline still in place on the daily chart. Bjørner still has the slight overall technical advantage in the short term.”
BTC falls back below its 200-week moving average
This week’s pullback in price has once again dropped the trading price of BTC below its 200-week moving average (200WMA), a metric that has consistently provided insight into what stage of the market cycle the top crypto is in.
According to Arcane Research, Bitcoin trading below the 200WMA “is not a common observation, and buying below this well-known technical indicator has historically been a profitable strategy.”
BTC price vs. 200-week moving average. Source: Lookintobitcoin.com
Much to the dismay of crypto followers, BTC has traded below the 200WMA for nearly two months, a first for the leading cryptocurrency.
“We have not seen this before and it may look like the important indicator has turned to resistance. This is undoubtedly a bearish technical signal, said Arcane Research.
As for where the price could go next based on current market conditions, the research and analysis firm warned of the possibility of a decline as low as $11,000 in a worst-case scenario, while noting that for now the 2017 high is offering support.
“The next major support levels on a weekly scale could be around $16,000 or even down between $11,000-$12,000. However, on the bright side, bitcoin is still trading above the 2017 peak and it appears that the 2017 peak is now acting as a solid support level.
A dull day in the altcoin market
Activity in the altcoin market largely mirrored the performance of Bitcoin, with most tokens trading flat on the day after weathering an early decline.
Daily performance in the cryptocurrency market. Source: Coin360
Ethereum (ETH) staking platform Lido DAO (LDO) led the alts for the second day in a row, gaining 11.3% as the Ethereum merger date draws ever closer. Other notable achievements include a 9.75% increase for MXC (MXC) and a 9.54% gain for Curve DAO Token (CRV).
The total cryptocurrency market cap is now $985 billion, and Bitcoin’s dominance rate is 39.3%.
Disclaimer: The views expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not an invitation to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept responsibility for any loss and/or damage arising from the use of this publication.
