A popular crypto analyst says Bitcoin (BTC) may need to move further below an important moving average (MA) before hitting its cycle bottom.
Pseudonymous trader Rekt Capital tells his 316,000 Twitter followers Bitcoin crossed its 200-week moving average for the first time since March 2020.
Explaining the historical patterns BTC follows after crossing this average, the analyst says,
“BTC tends to downside wick below this 200-week MA
In fact, in March 2020 BTC actually Weekly Candle Closed below the 200-week MA for the first time ever to perform a fake breakdown”
Explains the trader,
“BTC tends to downside wick -14% to -28% below the 200-week MA. So far, BTC has wicked -7% below the MA.
BTC may need to wick even deeper to inspire the feelings of extreme fear, uncertainty and maximum pessimism that are necessary to forming a bear market bottom.”
Rekt Capital also notes Bitcoin’s Relative Strength Index (RSI) is approaching levels last seen at the bottoms of the 2015 and 2018 bear markets.
An asset’s RSI is a momentum indicator measuring recent prices to determine whether it is oversold or overbought in a specific timeframe.
Bitcoin is trading for $22,587 at time of writing. The top-ranked crypto asset by market cap is up more than 2% in the past 24 hours but remains down more than 25% on the week.
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