Bitcoin bulls may win big as two key moving averages prepare to cross

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Bitcoin (BTC) lost a key bear market trendline last week as it shed almost 12%, but other chart data offers a silver lining for bulls.

As noted by popular Twitter user Dave the wave on Aug. 24, long-term moving averages (MAs) are about to repeat classic bullish behavior.

Analyst: Bulls could be about to “do well”

BTC/USD disappointed over the weekend as it put in lows not seen since the end of July. Since then, $21,000 has offered only weak support, and fears abound that new lows are coming.

One of the casualties of the downturn was the 200-week MA, data from Cointelegraph Markets Pro and TradingView shows, a level which had flipped from resistance to support the month prior.

Now back overhead and unchallenged by rebounds this week, the 200-week MA offers a verdict on the current lack of strength in Bitcoin.

“The amount of FOMO we saw on CT in the past 2 weeks during the $25k rally is unprecedented. This bulltrap almost has to play out,” analyst Venturefounder summarized after the 200-week MA failed as support.

Observing the behavior of the 50-week and 100-week MAs, however, suggests that all might not be lost.

In his Twitter thread, Dave the wave showed that the former is about to cross over the latter — and in the past, this has been followed by sustained price growth.

“Bitcoin 1 year moving average now crossing the 2 year moving average as per the corrective phase after a speculative run-up,” he wrote in accompanying comments.

“Looking good from a technical perspective…. no matter the sentiment. Those buying these levels have previously done well.”

BTC/USD annotated chart. Source: Dave the wave/ Twitter

He added that five months prior, the same pair of MAs had correctly assessed the incoming market downtrend which saw BTC/USD hit a macro bottom of $17,600 in June.

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BTC/USD 1-week candle chart (Bitstamp) with 50, 100, 200-week MA. Source: TradingView

Following on from Pi Cycle bottom

As Cointelegraph reported, there is more than one moving average-based chart mechanism flashing a bottom signal this summer.

Related: Here’s why holding $20.8K will be critical in this week’s $1B Bitcoin options expiry

The classic Pi Cycle Top indicator, which has caught macro bottoms throughout Bitcoin’s history, was already turning green in July, lending weight to the idea that June’s $17,600 really was a multi-year floor.

In an update on Pi this week, however, commentator Miles Johal acknowledged that bulls needed to clear higher levels to keep the status quo favorable.

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