The pace of bitcoin's ongoing sell-off is setting new records with every passing day, the latest being its test of a key long-term moving average for the first time in three years.
Indeed, the world's most valuable cryptocurrency network fell below its 200-week exponential moving average (EMA) of $4,180 yesterday, marking the first break of the crucial support since August 2015. Back then, BTC was changing hands around $220, according to Bitstamp data.
At press time, BTC is changing hands at $4,440, having clocked a 14-month low of $4,048 yesterday.
Notably, the recovery has established the 200-week EMA as the level to watch out for in the near-term. The already bearish technical setup would be bolstered further if the cryptocurrency finds acceptance below the long-term EMA support, leading to a deeper drop below the psychological support of $3,000.
As can be seen above, the 78.6 percent Fibonacci retracement of the rally from 2015 lows to 2017 highs lines up at $4,328 - just above the 200-week EMA of $4,180. So, it seems safe to say that the area between $4,100 and $4,350 is packed with key support lines.
The chart also shows that a break below the 200-week EMA could prove costly as the next major support is seen directly at $3,130 – the widely followed 200-week simple moving average.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
image via Shutterstock; Charts by Trading View
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.