Bitcoin hasn’t performed all too well over the past 24 hours. After holding $6,700 for days on end, the cryptocurrency suddenly tanked on Friday evening, falling as low as $6,050 by the next morning, marking a decline of 10% from the daily highs.
The cryptocurrency has yet to recover, remaining under $6,200 as of the time of this article’s writing. Despite this, BTC’s chart printed a bullish silver lining, one that may support it moving forward.
Bitcoin Holds Crucial Moving Average, Boding Well For Bulls
If you’ve been on Crypto Twitter over the past few weeks, you’ve likely noticed the importance investors give to the 200-week moving average, a technical level that almost exactly marked Bitcoin’s bottom in December of 2018 and also coincided with bottoms in 2015.
It should come as no surprise, then, that when BTC fell under the level (approximately $5,800) after the flash crash seen on March 12th and 13th, investors were running scared, claiming that more downside was imminent. Chris Burniske of Placeholder Capital, for instance, wrote:
“As someone recently reminded me, in a 2018 interview with CNBC I stated the real capitulation starts if we break the 200 week MA. We did not break the 200 week MA in 2018 / 2019 – it provided the perfect bounce for Bitcoin. But now that we broke and closed last week below $5500, what was once support becomes resistance.”
Surprisingly, though, over the past two weeks, Bitcoin has decisively reclaimed this level, and looks poised to close the weekly candle above this crucial support.
$BTC – back above the MA200 on the weekly so that’s good, phew 😅 pic.twitter.com/GnNhs26Zf5
— BIG Chonis (@BigChonis) March 28, 2020
This isn’t the only silver lining that should have Bitcoin bulls pleased.
Charlie Morris, the founder of cryptocurrency analytics site ByteTree, shared that on March 25th, Bitcoin miners old 2,788 coins against 1,588 mined, resulting in $7.2 million in BTC sold that on a normal day would’ve been held.
Despite this added selling pressure, the price of the cryptocurrency didn’t drop, rather, the “market took it” and rallied. According to Morris’ analysis, this is a bullish sign.
Case in point: this chart from the analysis shows that whenever miners sell more than they mine (blue line), Bitcoin has outperformed the returns it posts during regular market conditions.
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