The price of Bitcoin went below a long-standing support wave that was quite significant in maintaining the strong bullish bias intact. This was even more poignant after the crypto market crash in March.
This wave, which has been referred to as the simple moving average over a period of 50 weeks, represents the average price paid by traders to BTC in the last 50 weeks. Over the years, the very invalidation of such a price floor has definitely paid its price in pushing the market of BTC into multiple bearish cycles.
Bitcoin Fractal Targets $12,000 To $13,000
The wave was quite instrumental in providing Bitcoin with a support base during its period of correction from a high of $15,000 back in 2019. Further, it did well as a price floor until the March of 2020, when the pandemic resulted in a market crash on a global level.
Bitcoin Master, one of the many pseudonymous chartists on Twitter, has put forward their concerns after they understood the potential of BTC to undergo an average price decline of 80% when it breaks bearish on the simple moving average price on its 50th day. The analyst further noted that in the event the fractal actually works, the exchange rate of BTC/USD could definitely crash to a level of $13,000.
Mike McGlone, the senior commodity strategist of Bloomberg Intelligence, has also highlighted the simple moving average over 50 weeks in a July tweet. But he has gone ahead and called into question the ability of this wave to withhold the pressure of selling. The analyst did recommend that investors should not be so open to dumping the holdings in Bitcoin right away.
He explained that selling Bitcoin on initial dips below the moving average of 50 weeks is definitely going to make one lose money.