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The 200-day simple moving average (SMA), a key long-term price indicator for Bitcoin, appears to be losing its bullish momentum as the US economy added fewer jobs in August 2024.
Bitcoin needs to overcome the 200-day SMA to reverse the trend
The 200-day SMA is considered one of the more reliable long-term indicators to gauge an asset’s upcoming price action. Bitcoin’s 200-day SMA is showing weakening bullish momentum, bringing little joy to short-term traders.
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Notably, this is the first time since October 2023 that the 200-day SMA appears poised to enter bearish territory. Since late August, the daily average price increase for BTC has not exceeded $50, while consistently posting moves above $200 per day in the first half of 2024.
At the time of writing, the 200-day SMA stood at $63,840, about 13.96% higher than the current BTC price of $56,840.
It is worth emphasizing that short-term moving average indicators such as the 50-day SMA and the 100-day SMA have already passed their peak and are trending downwards. Recently, there was a bearish crossover when the 100-day SMA fell below the 200-day SMA.
According to cryptocurrency analyst Ali Martinez, the Stochastic relative strength index (RSI) does spotted a trend reversal from bullish to bearish on the 2-month Bitcoin chart. Going by historical data, such a move has typically resulted in a significant correction of up to 75.50%.
In addition, Google Trends shows that searches for the word “Bitcoin” are at their lowest since October 2023, when BTC hovered around $30,000.
Adding to the overall bearish sentiment surrounding the leading digital asset, former CEO of BitMEX cryptocurrency exchange Arthur Hayes said posted on X that he is currently short Bitcoin and could see the crypto asset crash to levels below $50,000 this weekend.
Unlike other market experts opinion that Bitcoin will likely bottom at $55,000 before the influx of US liquidity reignites the severely lacking buying pressure in the crypto markets.
Bitcoin’s fundamentals remain intact
While several crypto analysts appear to be bearish on Bitcoin’s short-term price movements, the long-term bull scenario for the leading digital asset remains unchanged.
Crypto analyst Crypto Jelle stilt that Bitcoin’s tepid price action over the summer could come to an end in early October, before another upward rally could take place.
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Institutional interest in Bitcoin also continues to rise, as Swiss banking giant ZKB recently said rolled from Bitcoin (BTC) and Ethereum (ETH) trading and custody services for its customers. At the time of writing, BTC is trading at $56,018.
Featured image from Unsplash.com, chart from TradingView.com
