When the crypto market crashed last month due to the Terra fallout, many predicted a steep fall in Bitcoin’s price. As the price was hovering around the $30,000 mark, speculation was rife that it would further fall to $20,000 level. This week, the Bitcoin weekly average is in question.
Until last week, Bitcoin maintained the $30,000 price level only to slide to under $22,000 this week. The all important $30,000 price range was breached, bringing talk of the next support level.
Bitcoin Weekly Average To Be Broken?
As of writing, BTC is trading at $21,035 down around 1% in the last 24 hours, according to CoinMarketCap. Incidentally, this price is below Bitcoin’s 200-week moving average of around $21,700, a behavior observed only five times previously.
Trading charts reveal that Bitcoin had touched the 200-week average only on two other occasions in the last three years. In December 2018, Bitcoin touched the average mark when it was trading just above the $3,000 level. Most recently in March 2020, BTC intercepted the 200-weekly average at around $5,450.
Will This Mark The Price Bottom?
The previous instance of matching the key indicator marked the bottoming of Bitcoin’s price. More importantly, the price correction after touching the 200-weekly average happened almost instantly on those occasions. It remains to be seen how Bitcoin would fare by the end of this week.
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Speaking to CNBC on Thursday, investor Jeffrey Gundlach said the trend around Bitcoin trading is not positive at the moment. He said he would not be surprised if BTC falls further from the $20,000 level.
“I would not be surprised at all if Bitcoin went to $10,000. After it fell to $30,000 it was apparent that it would swiftly fall to the $20,000 range.”
Last night, after Federal reserve announced rate hike at the highest level in around three decades, Bitcoin fell slightly. After falling below the $20,300 level, BTC quickly rebounded to above $21,000 price range.
Meanwhile, crypto traders are closely watching the weekly close in the current setup of below the historic average. CryptoBirb, a crypto analyst, also took to Twitter to comment on this interesting situation. “Bitcoin rarely closes a week below the 200-week mean.”
Another trader Capo said the demand to defend the $20,000 level was getting weaker. If the support level breaks, next support could be found between $16,000 and $18,000, he predicted.
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