Bitcoin has fallen over the past 24 hours and is now at the $26,200 level. This is why this level is important for the asset.
Bitcoin 200 WMA & 111 DMA are now both $26,200
In a new tweet, the analytics company reports Glasnode has spoken about how the various technical pricing models for Bitcoin may currently interact with the price of the asset.
There are four relevant technical pricing models here, and each is based on different moving averages (MAs) for the cryptocurrency.
An MA is a tool that finds the average of a certain quantity over a certain area, and as the name implies, it moves with time and changes its value according to changes in that quantity.
MAs, when taken over long distances, can smooth out the quantity curve and remove short-term fluctuations from the data. This has made them useful analytical tools, as they can make studying long-term trends easier.
In the context of the current topic, the relevant MAs for Bitcoin are 111 days MA, 200 weeks MA, 365 days MA and 200 days MA. The first of these, the 111-day MA, is called the Pi Cycle indicator and is generally useful in identifying short- to medium-term momentum in the asset’s value.
The 200-week MA is used to find the base momentum of a BTC cycle, as 200 weeks equals almost 4 years, which is about the length of BTC cycles in the popular sense.
Here is a chart showing the trend in these different Bitcoin technical pricing models over the past year:
Looks like pairs of models have come together in phase in recent weeks | Source: Glassnode on Twitter
As shown in the chart above, these different Bitcoin price models take turns providing support and resistance to the price during different periods of the cycle.
For example, the 111-day MA recently turned into support, when the price bounced back from this level during the plunge in March this year, as shown in the chart.
The 111-day and 200-week MAs have recently entered phase, as both values are currently at $26,200. This is the level at which Bitcoin has found support for the past few days, so it seems that the basis formed by these lines may currently help the price.
Glassnode notes that if there is a break below this support area, the next levels of interest could be the 365-day and 200-day MAs. The former simply represents the annual average price, while the latter metric is called the Mayer Multiple (MM).
The MM has traditionally been associated with the transition point between bullish and bearish trends for the cryptocurrency. When the 111-day MA provided support to the price in March, the metric was in phase with the MM.
It can be seen from the chart that the 365-day and 200-day MAs have also recently found an interesting confluence as their current values are $22,300 and $22,600, respectively. This would imply that between $22,300 and $22,600 could be the next major support area for the asset.
BTC price
At the time of writing, Bitcoin is trading around $26,200, down 4% over the past week.
BTC has plunged during the past day | Source: BTCUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, Glassnode.com
