Reading time: ~ 2 m
The sale of Bitcoin on Monday led to a drop in quotations to the line of the moving average (MA) indicator, with a period of 200 days. In technical analysis, MA 200 is of great technical importance, dividing the long-term decline or growth of the analyzed asset.
This year, the BTC rate has been below the line of this indicator twice already, which indicates the weakness of the bulls’ positions and may lead to a serious decline in the rate with the next wave of speculative selling.
The bears have chosen the most opportune moment for this, tomorrow there will be a meeting of the US Federal Reserve, which increases the likelihood of a general collapse of financial markets. The head of the department, Jerome Powell, may report on the acceleration of monetary tightening, which will deprive investors of “cheap money” invested in venture capital.
In this case, Bitcoin will “dive” under the MA 200 for a fairly long time, possibly repeating the events of the 2018 crypto winter. Signs of this alignment are visible in the reporting of Glassnode, whose analysts noted a record decline in the flow of BTC to cryptocurrency exchanges.
The platforms received “live” Bitcoin from traders at the level of the historic lows of 2015. Some consider the decrease in the flow of BTC to exchanges to be an indicator of hold, but the above chart easily allows you to see the coincidence of the minimum values with the longest drops in the rate in the history of cryptocurrencies in 2018 and 2019.
On the other hand, the 200 MA line may provide additional technical support to the bulls if Powell “deceives” the bears’ expectations. Tightening of monetary policy cannot be avoided, but the Fed may decide to prolong this process as much as possible. In addition, following the US on Thursday, the European Central Bank will have its say, which is capable of issuing a diametrically opposite decision by adding “cheap money” to the markets.