Bitcoin's Move Below 20-DMA Possible Short-Term Bearish Signal, Analysts Say

The world’s largest cryptocurrency by market value traded at a 10-day low and slipped below the 20-day moving average.

AccessTimeIconApr 20, 2023 at 4:43 p.m. UTC
Updated Apr 21, 2023 at 6:01 p.m. UTC

Bitcoin lost ground for a second straight day on Thursday, dropping to a 10-day low of $28,300 as traders appeared to move away from risky assets.

After rallying since the start of the year, the world’s largest cryptocurrency by market value, bitcoin, appears to be losing ground. Bitcoin closed below the 20-day moving average (DMA) on Wednesday, according to data from TradingView, signaling a sign of weakness. The last time the cryptocurrency traded below the 20-DMA was in mid-March.

Bitcoin's 20-Day Moving Average (TradingView)
Bitcoin's 20-Day Moving Average (TradingView)

A 20-day moving average is a short-term view and could allow investors to trigger further selling pressure, according to Laurent Kssis, a crypto trading adviser at CEC Capital.

“The 20-day moving average has less lag [time it takes to signal a potential reversal] and tracks more closely bitcoin,” said Kssis. “In our view it shows a correction to the market which could accentuate.”

The drop comes a day after a large bitcoin sell order on crypto exchange Binance and an unexpectedly high U.K. March inflation figure of more than 10%.

“This pullback doesn’t look positive. However, when looking at bitcoin’s yearly chart, it's clear we have just witnessed a period of exceptional growth as the industry recovers from the crypto mishaps of the past few years,” said Sheraz Ahmed, managing partner at Storm Partners, in an interview with CoinDesk.

“We could be witnessing the beginnings of an overdue but overall healthy correction, which should encourage further accumulation,” added Ahmed.

In traditional markets, sentiment was knocked by a decline in Tesla (TSLA) shares, which dropped 8.5% on the day, following the company’s earnings report released Wednesday. It showed a more than 20% drop in net income compared with last year. The Dow Jones Industrial Average and S&P 500 are currently down while the Nasdaq is flat.

Craig Erlam, an analyst at foreign-exchange trading firm Oanda, said in a Thursday note that despite bitcoin’s rally since the start of the year, the recovery may be running on fumes.

UPDATE (April 20, 2023 16:00 UTC): Updates the stock exchanges' movement.

Edited by Aoyon Ashraf.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

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; 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 employees, including journalists, may receive options in the Bullish group as part of their compensation.

Lyllah Ledesma

Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds bitcoin, ether and small amounts of other crypto assets.