Charts show that the Bitcoin 600-day moving average (MA) has hit the BTC price curve again. Will the line once again act as support for the crypto?
The Bitcoin price curve touches the 600-day ma again
As an analyst pointed out in a CryptoQuant post, BTC price has once again fallen below the 600-day MA support line.
A “moving average” (or MA for short) is an analytical tool that averages a given quantity over a period of time and constantly updates and changes the value of that quantity (in this case, the price of Bitcoin) over time. Hence the “move” in the name.
MAs can be very useful for analysis as they smooth the price curve by hiding local random fluctuations. Such short-term ups and downs in BTC value are generally not relevant to any long-term trend study, so MAs are typically used when looking at large time frames.
An analyst can choose to take an MA over any period of time, be it just a minute or even a thousand days.
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The quant in the post referenced the 600 day version. Here is the chart showing the trend compared to Bitcoin’s price over the past year:
The 600-day MA curve seems to have hit BTC price again | Source: CryptoQuant
As you can see in the chart above, bitcoin’s value has touched the 600-day MA multiple times as the price declined after forming the all-time high last year.
In each of these retests, the 600-day MA curve line served as support for the crypto’s price and helped it propel it back up.
Now the two lines have touched again but it remains to be seen whether the support will hold or not this time.
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When the price action is below the 600-day MA curve, Bitcoin can see a real pullback, just like it did when it lost the 200-day MA support.
BTC price
At the time of writing, Bitcoin’s price is hovering around $39.8k, down 9% over the past seven days. Over the past month, the crypto has accumulated 2% in gains.
The chart below shows the evolution of the coin’s price over the last five days.
It looks like the price of BTC crashed a few days ago | Source: BTCUSD on TradingView
After holding above the $40,000 mark for almost a month, Bitcoin seems to have fallen below the mark again. After the decline, the price has been moving sideways for the past few days.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
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