Share this article
Bitcoin Faces Close Below Long-Term Support In First Since 2015
If bitcoin closes the week below the 50-week moving average it will increase the likelihood of a sell-off to $6,000
Updated Sep 13, 2021, 7:59 a.m. Published May 25, 2018, 10:00 a.m.
Make us preferred on Google
Bitcoin risks closing below the 50-week moving average (MA) – an important long-term support not breached for over two-and-a-half years.
With the bears already on the offensive following the recent sell-off, prices are likely to suffer if bitcoin closes on Sunday below the key support, currently seen at $7,611. More worryingly for the bulls, since the cryptocurrency has not traded below the 50-week MA since October 2015, acceptance below that level would only add credence to the argument that the long-term bull run has ended.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
As of writing, bitcoin is changing hands at $7,449 on Bitfinex, having dropped below the 50-week MA on May 23.
Weekly chart (2015–2018)
As seen on the chart above, the long-term moving average had acted as a strong support in the first quarter. BTC found strong bids in mid April following the repeated failure (marked by a circle) on the part of the bears to penetrate the 50-week MA.
Subsequently, the rally from the 50-week MA to $9,990 (May 5 high) reinforced the moving average as a strong long-term support. Hence, a downside break would raise the odds of a slide to fresh 2017 lows below $6,000.
Looking ahead, price chart analysis suggests that bitcoin is likely to end the week below the key $7,611 level.
To start with, the weekly relative strength index (RSI) is below 50.00 (in the bearish territory) and trending south in favor of the bears. The RSI has also found acceptance below the key support zone of 53.55–55.00, which only strengthens the bear case.
Meanwhile, the daily chart below also shows scope for a drop below $7,000.
Daily chart
The bears currently have the upper hand, as indicated by the lower highs and lower lows pattern, downside break of the channel, downward sloping (bearish) 5-day and 10-day MAs.
The RSI is holding below 50.00 (in the bearish territory), but well above 30.00 (oversold region), indicating room for sell-off to $6,870 (triangle support).
Hourly chart
Despite the bullish price RSI divergence on the hourly chart, BTC failed to cross the falling trendline hurdle, underscoring the strong bearish sentiment in the market.
View
- BTC looks set to close below the 50-week MA (at $7,611) for the first time since October 2015, signaling a major bearish breakdown and opening the doors for a re-test of $6,000 (2018 low).
- A corrective rally may save the day for the bulls, however, the probability of a bearish weekly close below the 50-week MA will remain high as long as bitcoin is trading below $8,644 (May 21 high).
Bitcoin in water image via Shutterstock
More For You
Pudgy Penguins is building a multi-vertical consumer IP platform — combining phygital products, games, NFTs and PENGU to monetize culture at scale.
What to know:
Pudgy Penguins is emerging as one of the strongest NFT-native brands of this cycle, shifting from speculative “digital luxury goods” into a multi-vertical consumer IP platform. Its strategy is to acquire users through mainstream channels first; toys, retail partnerships and viral media, then onboard them into Web3 through games, NFTs and the PENGU token.
The ecosystem now spans phygital products (> $13M retail sales and >1M units sold), games and experiences (Pudgy Party surpassed 500k downloads in two weeks), and a widely distributed token (airdropped to 6M+ wallets). While the market is currently pricing Pudgy at a premium relative to traditional IP peers, sustained success depends on execution across retail expansion, gaming adoption and deeper token utility.
More For You
Crypto Markets Today: Largest tokens decline, with derivatives signaling caution ahead
Even though the Fed's decision to hold interest rates was widely expected, geopolitical tensions and a rotation into haven assets left crypto traders facing a sea of red.
What to know:
- Bitcoin fell and the CoinDesk 20 index dropped as a risk-off shift pushed investors into safe-haven assets.
- Crypto derivatives showed falling open interest, muted volatility and a growing bias toward protective puts and short positions.
- Optimism’s community approved a 12-month plan to use about half of its Superchain revenue for OP token buybacks starting in February. Still, the token fell.
Top Stories
