Bitcoin tests the 200D-SMA for the third time since August, with analysts monitoring for a potential bullish breakout.
After briefly dipping below $63,000,
Bitcoin’s
resurgence toward $64,000 has sparked renewed interest, particularly as it confronts a critical technical level: the 200-day Simple Moving Average (200D-SMA).
200D-SMA: A Persistent Barrier
According to an
observation
by Ali Martinez, an expert analyst, the 200D-SMA has proven to be a significant resistance level for Bitcoin. In mid-August, the first test of this moving average resulted in a rejection, causing a subsequent price decline. This showed its role as a formidable barrier.
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BTCUSD 1 Hour Chart TradingView
A second test in late August to early September saw another rejection, as Bitcoin struggled to break through this technical hurdle.
Now, with Bitcoin once again testing the 200D-SMA in mid-September, analysts are cautious yet hopeful. Per Martinez, a successful break above this level could signal a potential bullish shift, marking a crucial turning point for the crypto’s short-term outlook.
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Parallel Market Trends
In yet a separate bullish post by Martinez, the analyst’s observations reveal notable parallels between Bitcoin and other major assets like Gold and the S&P 500.
Both assets have recently exhibited bullish trends following extended periods of consolidation, suggesting a similar trajectory could unfold for Bitcoin.
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Gold’s price surged from $2,300 to over $2,620 after consolidating within a defined range, propelled by strong buying interest. The S&P 500 displayed a similar pattern, breaking out after a consolidation phase and posting significant gains.
Bitcoin’s current price movement, which has fluctuated between $53,500 and $72,000, hints at potential upside if it can overcome its key resistance near $70,000.
Bullish Flag Observed
Further supporting a bullish outlook, technical indicators point to strengthening market dynamics.
John Bollinger, known for the Bollinger Bands,
identified a promising pattern
on Bitcoin’s weekly chart. A W-shaped formation, nestled within a downward-sloping regression channel, has emerged, often interpreted as a flag pattern.
This setup typically indicates market consolidation before a continuation of the prior trend. The price has oscillated within the channel, finding support near the lower band, which has led to a bounce back, highlighting robust buying pressure at these levels.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.