Bitcoin continues to be in a lull, with its price locked in a narrow range of $32,000 to $35,000 for more than two weeks. Due to prolonged consolidation, popular indicators like the relative strength index are no longer suggesting directional bias.
However, a chart analysis of long-term moving price averages suggests more bearishness ahead. The cryptocurrency's 100-day simple moving average (SMA) is about to cross below the 200-day SMA for the first time since May 2020.
The so-called bearish crossover comes weeks after the 50- and 200-day SMAs charted the "death cross." Bearish crossovers of longer duration averages often lag price action and trap traders on the wrong side of the market.
For instance, bitcoin barely saw any bearish moves following the previous bear cross of 100- and 200-day SMAs in May 2020. A similar bear cross was observed in April 2018, October 2014 and April 2014, coinciding with interim price bottoms. The one observed in November 2019 was followed by a deeper price decline.
That said, the absence of solid follow-through to the repeated defense of the $30,000 support in the past few weeks is a cause for concern.
According to Katie Stockton, founder, and managing partner of Fairlead Strategies, a move above the 50-day SMA resistance at $35,621 may bring more buyers, lifting prices above $40,000.
The immediate support is seen at $32,100 (July 8 low) followed by $30,000. At press time, bitcoin was trading near $33,700, representing a 1.5% drop on the day, according to CoinDesk 20 data.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups 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, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.