Charts show that bitcoin price appears to be falling below the 600-day moving average, a sign that could be bearish for the crypto.
Bitcoin is starting to lose the 600-day MA support line as the price dips back below $39,000
As one analyst pointed out in a CryptoQuant post, the crypto’s price is now breaking below the 600-day MA curve, a line that has served as support for BTC in the past.
A “moving average” (or MA for short) is an analytical tool that takes the average of any quantity over a period of time. As the name suggests, this average is constantly updated as time passes and new values arrive.
What this tool does is that it removes all short-term fluctuations from the chart under study (which is Bitcoin price in this context) and flattens the curve.
This makes moving averages very useful for studying long-term trends where local fluctuations are not that important.
Related Reading | Will Bitcoin See Another Big Drop Soon? Historical trend can say yes
MAs can be taken over any range, be it two days, two hundred days, or even just two minutes.
Now here is a chart showing the trend in the 600-day MA version of the bitcoin price:
It looks like the price curve is now falling below the 600-day MA line | Source: CryptoQuant
As you can see in the chart above, Bitcoin’s 600-day MA curve has served as support for the coin’s price many times during the year.
However, the recent trend seems to indicate that this support line is now breaking down as the price line crosses below the MA on the daily timeframe.
Related Reading | Time Vs Price: Why This Bitcoin Correction Was The Most Painful Yet
However, the breakdown may not be fully confirmed yet. The quant in the post believes that if the breakdown here fails, Bitcoin could use the level as a stepping stone to surge higher.
If the collapse persists, the cryptocurrency may face a bearish outcome.
BTC price
At the time of writing, Bitcoin’s price is hovering around $38.8k, down 1% over the past seven days. Over the past month, the crypto has lost 12% in value.
The chart below shows the evolution of the coin’s price over the last five days.
It looks like the price of the coin has been dropping for the past few days | Source: BTCUSD on TradingView
Bitcoin appeared to have briefly been on the path to recovery a few days ago as the coin broke through $42,000.
However, the cryptocurrency appears to have tumbled again as it dips below 39,000 again.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
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