Bitcoin Bulls Must Recapture These 2 Levels As ‘Death Cross’ Still Looms

Bitcoin bulls must reclaim these 2 levels as ‘death cross’ still looms
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bitcoin (BTC) faces a sink-or-swim stress test to confirm its “macro breakout,” a new analysis says.

in a cheep the feb. On Feb 2, the On-Chain Monitoring Resource Material Indicators marked key levels to shift to support after BTC/USD broke above $24,000.

Bitcoin Price Prepares for Trend Line Showdown

In what was ultimately a boon for Bitcoin bulls, the United States Federal Reserve delivered what risk-on traders wanted to hear the feb. one.

With Chairman Jerome Powell using the word “disinflation,” hopes immediately began to bet that rate hikes would end sooner and easier monetary conditions would return to place.

The mood was palpable across all cryptocurrencies, with BTC price action reversing an initial decline to see fresh six-month highs of $24,250 on Bitstamp.

While a subsequent correction brought the largest cryptocurrency down to around $500, the mood has remained upbeat ever since.

However, for the good times to continue, Material Indicators believes that BTC/USD must now address two trend lines, which have formed resistance for much of 2022.

These are the 50 and 200 week moving averages (WMAs), and the bulls have not been able to retest them until now, let alone flip them to support.

The 50WMA and 200WMA are currently at $25,345 and $24,837, respectively, data from Cointelegraph Pro Markets Y TradingView confirm.

“[BTC] you should test the key moving averages to confirm macro breakout or fakeout,” part of the comment read.

An accompanying chart showed the state of the Binance order book at the time, with resistance rising to allow the spot price to rise with it. As Cointelegraph reported, this phenomenon had has already been playing before the Fed event.

Annotated chart of BTC/USD (Binance) order book data. Source: Material Indicators / Twitter

Continuing, Material Indicators described the subsequent BTC price surge as a “Bull Herd Stampede through the gate” in the absence of resistance pressure.

“Whether it leads to the slaughterhouse or auction house to be determined in the 50WMA and 200WMA,” he added.

“Toppy Signs” and “Wild Cards”

Currently, BTC/USD has spent longer than ever below 200WMA, a key aspect of its 2022 bear market, which sets it apart from others in its history.

Related: The best January since 2013? 5 things to know about Bitcoin this week

Also, the two WMAs in focus are forming what is known as a “death cross”, where the falling 50WMA crosses below the 200WMA.

If this plays out, analysts fear it could lead to further downside, as has previously happened with events on shorter time frames,

“Risk assets have certainly correlated, but BTC outperformed TradFi in January with a 40% rally,” Material Indicators co-founder Keith Alan said, commented before the fed

“Now, SPX is at a triple top on the Monthly and BTC is heading for a Death Cross on the Weekly. These are good signs, but the FED, FANG and the job market are all handing out wild cards.”

BTC/USD (Bitstamp) 1-week candlestick chart with 50,200MA. Source: TradingView

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