Bitcoin needs to hold $42,333 for now. It’ll be telling for other risk assets, Bitcoin could see the $26,000 – $23,000 level More on other support levels #bitcoin later, but isn’t trading at 500% above its 200 weekly moving average anymore, instead it’s now 126%.
Below is a weekly chart, the 200 week moving average has risen from $15,000 to $20,000 over the past 4 months, which is in keeping with my price and moving average convergence post dated, October 18, 2021.
Yesterday, I provided crypto trading clients with some technical advice about how I see the price action in Bitcoin.
Referencing the dates in each chart (image) below, you will see my comments about ‘heightening buying interest at $29,300’ in the larger June 22 edition.
The close-up chart shows that overnight, Bitcoin traded to a low of US$29,247 and then bounced 11%, back to US$32,600.
A week ago I wrote this about Bitcoin’s price action.
The arrival of the Bitcoin cavalry saw it trade to 3 standard deviations above its weekly mean and thus it’s logical to assume that the ‘fat part of the trade’ has been seen.
Such a 3-sigma event is expected approximately every 3 years.
Earlier this week, it lurched a $1,000 higher to reach $19,500 before falling 11% in the past 2 days.
As I write this, it’s now trading at $17,180.
Whether you consider Bitcoin a currency (which is different to a store of value) or a speculative digital asset, its underlying price volatility makes it a most fascinating asset to monitor, both mathematically and behaviourally.
Over the next couple months, I expect Bitcoin to trade back to the $13,500 level and notwithstanding any upheaval, likely to hold $12,000 as illustrated by the trend lines in the chart below.
Incidentally, over the past 2 days ,XRP and Ethereum (other cryptocurrencies) have fallen 24% and 15% respectively.
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