saving drop – Bitcoin (BTC) continues its back and forth on both sides of the $30,000. Technical indicators in the markets and on-chain data are drawing a pattern to break out of the current routine. However, this scenario would initially benefit the bears.
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Towards a bottom exit for Bitcoin?
Bitcoin price momentarily loses $30,000 today, June 7, 2022, before regaining it. Bitcoin trades at $31,109 at the time of writing this article. It is currently posting a daily mini-loss of 0.8%.
While Bitcoin was trading below $29,700, trader Michaël van de Poppe indicated that a breakout of “$29.7-29.9K”, was a harbinger of a potential reconquest of ” $32.8K and/or possibly $35K by cryptocurrency.
These bullish forecasts are they justified in view of the technical indicators ? Trader Rekt Capital shared a chart showing Bitcoin stuck below the 50-week exponential moving average. It is trading above the 200 week exponential moving average.
Bitcoin is said to “tend to confirm bullish trends when it breaks above” the 50-week exponential moving average. And “it tends to confirm maximum financial opportunity when it reaches and breaks” the 200-week exponential moving average.
The 200 and 50 week exponential moving averages are currently around $27,000 and $39,850 respectively.
With $39,850 being far from current levels, a fall around or below $27,000 is it then the downward movement that will break the routine that has been in place for weeks?
The Hodlers keep their bitcoins warm
Should the markets actually expect such a drop? Glassnode data provide part of the answer. They indicate that the losses of long-term bitcoin holders “on exchanges have now reached a magnitude comparable to that of previous bear markets”.
These HODlers haven’t moved their bitcoins for at least 155 days. Their aggregate realized losses exceeded 0.006% market capitalization on May 29, 2022.
However, these losses could still increase and reach the peak at 0.015% market capitalization. This is the level of losses recorded during bear markets between 2018 and 2019.
Current losses for long-term bitcoin holders have been seen for about a month. They are extended for about a year during the period 2018 – 2019.
These historical data thus show a Bitcoin that could well register other significant declines. Therefore, it could more than double current losses HODlers.
Green one day, red the next, Bitcoin is still stuck in its $28,000-$32,000 trading range. As this situation cannot last forever, a drop below $27,000 seems likely to break the current routine. The prospect of a rise above $39,850 recedes.
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