- Bitcoin has traded below the 200-day moving average for over a week
- The moving average is now a resistance zone for Bitcoin around the $40k price level
- Bitcoin is also trading below the 6-month moving average
- BTC’s bullishness is hinged on reclaiming these two MAs otherwise a bear market will ensue
Bitcoin might have entered a bear market based on the fact that the King of Crypto has failed to reclaim the 200-day moving average as support. At the time of writing, Bitcoin has traded below this important moving average for eleven days. The 200-day MA is currently at the $40k price level that is also acting as a strong resistance level for Bitcoin.
Bitcoin Consolidating Below the 200-Day MA is Not a Good Sign
In a Twitter commentary earlier this week, Bitcoin and crypto analyst, MagicPoopCannon, pointed out that BTC consolidating below the 200-day moving average was ‘not a good sign’. He also reiterated that this moving average is now a resistance area and Bitcoin has never regained its bullish momentum if it traded over 3 days below this line. He explained:
Not to rain on the bull parade, but BTC has now spent seven [currently 11] days below the 200 MA. Never in the history of BTC, has it spent more than 3 days below the 200, and gone on to make new all time highs, and that only happened in 2013. We’re most likely in a bear market.
Bitcoin is Also Trading Below the 6 Month MA Which is Bearish
In a follow-up to his initial analysis, Magic also pointed out that Bitcoin was also trading below the crucial 6-month moving average. He also warned that a monthly close this month, below this moving average, will confirm that Bitcoin is indeed in a bear market.
He shared his analysis of a potential Bitcoin bear market through the following statement and accompanying chart.
BTC has confirmed the 200 day moving average (in purple) as initial resistance, and it may close the month below the 6 month moving average (in orange.) Neither of those things have ever happened in a bull market, which makes it very likely we’re in a bear market now.