Bitcoin Has Touched a Historically Significant Moving Average

Well known Twitter investor and cryptocurrency enthusiast @Willywoo brought to attention an interesting development regarding the price of Bitcoin.

Kissing the 128d MA is a very good sign. It was overheated till this. People familiar with BTC’s historic personality know that the 128d line needs to be touched many times during a bull market to stay grounded. They present good buying opportunities. pic.twitter.com/1QBo3QjtgD
— Willy Woo (@woonomic) August 29, 2019

The relationship between price and moving average (MA) can help forecast future price movement. Let’s take a look at this particular MA and see how the price has historically reacted to it.

Downtrend

The price of BTC is shown alongside the 128-day MA in the period from January 2018 to July 2019.

The moving average was touched seven times in 2018. These occurred in:

February (twice)
April
May
July
August
October

The MA was falsely breached five times before the price again dropped below it. The last two times, the price respected it as resistance, before breaking out in March 2019. Therefore, during the recent downtrend, the MA was not a good predictor of price movement, since it was breached five times, yet a bull run did not begin. We cannot say with certainty that as long as BTC is below its 128-day MA, it is in a downtrend.

Uptrend

The price of BTC is shown alongside the 128-day MA in the period from October 2015 to January 2019.

The moving average was touched 12 times. These occurred on:

2016 (January, February, August, September (twice,) October)
2017 (January, March (twice,) July, September)
2018 (January, February)

While the MA was breached by a wick several times, BTC bounced upward every single time. The relatively big sample size for 2+ years signifies that the 128-day MA is a good predictor of price movement during an uptrend. Therefore, as long as the price is above it, we can say it is in an uptrend. Will the price bounce at the current time and continue its uptrend? According to @Willywoo, it is worth exploring the possibility. Do you think BTC will bounce on the MA? Let us know in the comments below. Buy and trade cryptocurrencies with a 100x multiplier on our partner exchange, StormGain.

Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile. Images are courtesy of Shutterstock, TradingView, Twitter.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.