Bitcoin Won’t Go Below $20,000, This Historical Price Indicator Suggests

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Bitcoin Won't Go Below $20,000, This Historical Price Indicator Suggests

Key facts:
  • Only a couple of times in the last 7 years has bitcoin dropped below the indicator.

  • Bitcoin market cycles support $20,000 as a price floor.

Will we see bitcoin (BTC) with a market price below $20,000 again? With the cryptocurrency falling to its lowest levels this year and struggling to retake the 30,000 mark, this seems like the question to answer today. And there is an indicator that could give peace of mind to those who bought above the $20,000 mark.

The indicator in question is the 200 weekly moving average. Or, what is the same, the 200-week average that varies according to price fluctuations. Right now, said indicator is over 21,000 dollars. It means that this is the average price for bitcoin in a 200-week range.

But what does this data indicate about the near future for cryptocurrency? Rather, we would have to go back in time to get that possible answer: as TradingView data reflects, it has only crossed below the level of that average with force a couple of times. It was in the midst of the pandemic collapse of March 2020 and it lasted a little over a week.

Before that, it also happened for a couple of weeks between August and September 2015. A third example of that crossing It was given in December 2018. But it was not significant enough.

Now, if we refer to history, we can see that in a period of about 7 years, between June 2015 and today, this crossing can be considered a complete rarity. Just about three weeks below the indicator mark at more than 2,500 days.

The blue line represents the 200 weekly moving average. The yellow circle marks the March 2020 drop. Source: TradingView.

Another detail that could indicate that those levels below 20,000 will not return, is the fact that that moving average has been on the upside historically. While fluctuations and a long sustained bear market could bring it down, the cryptocurrency’s continued appreciation trend has so far only gone up.

Halving and historical cycles of the bitcoin market

The $20,000 mark is important to the bitcoin price story, not just because of the aforementioned indicators and data. It also represents the all-time high mark for the previous market cycle.

Historically, the reduction in bitcoin issuance (halving roughly every 4 years through the cut in half) has been accompanied with increases in the price levels of the cryptocurrency.

In the current cycle, after the 2020 halving, there has been a cap above $69,000 so far. And in the previous one, the maximum had been precisely around 20,000.

As with the 200 week moving average indicator, the top of the cycles data can shed light on the future of the price. So far, each cycle has not only served to set new price highs, but also the floor has also increased at every opportunity.

Never in history has the price fallen below the high of the previous cycle. Therefore, a drop of BTC below $20,000 would be quite a challenge to the short history of the cryptocurrency.

Despite these data, there are those who believe that this historical challenge could indeed occur. At least, that is the position of the economist Harry Dent, as we reviewed in CriptoNoticias this Thursday: for him, bitcoin (and all financial markets) still expect the worst. In the particular case of BTC, he foresees a fall of between 3,000 and 7,000 dollars in a bear market that would last until 2024.

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