Looking at the long-term chart, this suggests that a new market cycle will begin soon. Let’s take a closer look at the price and see if that will occur. For those of you more interested in video analysis, click below:
And with the 3 year MA.— dave the wave (@davthewave) December 4, 2019
The 1 year, 2 year, and 3 year coming back into alignment… pic.twitter.com/JfPQdAbS4j
Moving Average SignificanceThe historical Bitcoin price chart has had an interesting relationship with its moving averages (MAs). The Bitcoin price has never traded below its 200-week MA (4-year). It bounced on it twice in 2015 before beginning the upward move that led to the all-time high price. Throughout the entire move, the price did not react to the MA afterward. Similarly, the Bitcoin price bounced twice on the same MA in December 2018/January 2019. Afterward, it began an upward move that led to the $13,764 high. The Bitcoin price has traded above its 50- and 100-week MAs (1-, 2- year) for most of its history, with the exception of the periods in which it was heading to the bottom. Additionally, sometime after the bounce on the 200-week MA, the 50- and 100-week ones have made a bullish cross. In 2016, this was the catalyst for the upward move. Currently, the MAs are in the process of making a bullish cross.
Bullish Bitcoin CrossLooking closer at this possible bullish cross, we can see that the Bitcoin price has just moved above the 50- and 100-week MAs. However, it has found resistance at the $7600-$7800 area and has decreased slightly. This area could hold the key to whether we do one final move downward or if we head immediately towards resistance. A weekly close below the resistance area would indicate the former — while a close above would support the latter.
Significant ResistanceSince reaching the June 24 high, the Bitcoin price has been decreasing. It is trading in one of two possible patterns:
- The first (dashed line) suggests that Bitcoin was trading inside a descending wedge, out of which it broke out on October 25 (yellow arrow). However, that proved to be an illegitimate breakout — since the price fell inside the line once again. It is currently in the process of breaking out.
- The second scenario has Bitcoin trading inside a parallel descending channel, with both the resistance and support lines having been validated several times. The price initiated an upward move on November 24.
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.
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.