BTC and the 200 Moving Average
Updated
In the past the 200MA has provided excellent entries for getting into BTC however will that be the case this time? Only time will really tell.
A few observations are
- BTC can spend a long time in this region before it takes off, ie 10 weeks in 2019. Quickest has been the V shape recovery for the Cov crash in 2020 with 2weeks.
- Coincides with the extreme lows on the RSI on the weekly chart. RSI on the weekly is rarely in the oversold region.
- The lowest it has fallen below the 200ma on this Bitstamp chart is 29% - wicked down but did close almost at the line.
- Without checking can almost guarantee it also coincides with the worst news/media cycle. This is the END ahhhh.
- The volume typically gets a spike, however does anyone use Bitstamp anymore? ie other charts will show different volume, I chose the bitstamp chart as it has a long 200ma.
So now I am waiting for the close of the weekly candle (1day and 20hours left). Expecting volatility. Do we get a nice wick to the downside? I drew in a white line of 29% down from the 2020 crash, still a long way to go 14-15k (cant hurt to have a few buy orders at this range just in case.) Do we close, close to the line and stay in this area a while or is the media right and we close below the 200ma and this is the end? the 200 would become resistance or the market makers may use this unprecedented close to trap a few more bears?
At the end of the day BTC has closed below many moving averages before and then made its way up again but sure it can take a long time.
If you believe that BTC will be here in another 10 years and will continue its path, then buying under here historically can't be the worst decision and would be considered a great buy in years to come.
However like everything in life the past isn't always a clear indication of what is to come in the future. The safest option would be to wait for to retest the 200MA once it gets above it and then get in for
still a good price.
Good Luck everyone and remember to DYOR.
A few observations are
- BTC can spend a long time in this region before it takes off, ie 10 weeks in 2019. Quickest has been the V shape recovery for the Cov crash in 2020 with 2weeks.
- Coincides with the extreme lows on the RSI on the weekly chart. RSI on the weekly is rarely in the oversold region.
- The lowest it has fallen below the 200ma on this Bitstamp chart is 29% - wicked down but did close almost at the line.
- Without checking can almost guarantee it also coincides with the worst news/media cycle. This is the END ahhhh.
- The volume typically gets a spike, however does anyone use Bitstamp anymore? ie other charts will show different volume, I chose the bitstamp chart as it has a long 200ma.
So now I am waiting for the close of the weekly candle (1day and 20hours left). Expecting volatility. Do we get a nice wick to the downside? I drew in a white line of 29% down from the 2020 crash, still a long way to go 14-15k (cant hurt to have a few buy orders at this range just in case.) Do we close, close to the line and stay in this area a while or is the media right and we close below the 200ma and this is the end? the 200 would become resistance or the market makers may use this unprecedented close to trap a few more bears?
At the end of the day BTC has closed below many moving averages before and then made its way up again but sure it can take a long time.
If you believe that BTC will be here in another 10 years and will continue its path, then buying under here historically can't be the worst decision and would be considered a great buy in years to come.
However like everything in life the past isn't always a clear indication of what is to come in the future. The safest option would be to wait for to retest the 200MA once it gets above it and then get in for
still a good price.
Good Luck everyone and remember to DYOR.
Note
Unfortunately the 200MA didn't hold, it broke and now we are consolidating below.
- It has not done this before, so in order to get an idea of what it may do, I decided to add the 100 (green) & 300MAs (Blue).
- In the 2018 crash when BTC went from 6k to 3k it happened when we broke the 100MA/weekly it then fell to the 200MA and consolidated around this area for months. Then eventually broke above the 100 again.
- 300MA hasn't formed for very long since May 2017 and price has only touched it once March 9, 2020.
- So from a Moving average perspective maybe the 300ma becomes the new 200ma from the past and acts as the 200 did when we broke the 100ma?
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