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Last month, CryptoSlate reported that the price of Bitcoin (
$75,894.00 ) fell below all five key medium to long-term moving averages for only the fifth time in its history.
Previous instances of this occurring resulted in a strong rally for BTC, leading to some technical analysts calling these events “a generational buy opportunity.”
Six weeks on from the original post, how is Bitcoin ( $75,894.00 ) faring?
Bitcoin ( $75,894.00 ) Moving Averages
Moving averages refer to a technical analysis indicator used to identify the trend direction of a particular crypto asset.
It is calculated by summing all the price data points during a specific period, then dividing the sum by the number of time periods. Any period can be used. However, five commonly used periods for assessing medium to long-term trends are the 60-day, 120-day, 200-day, 360-day, and 720-day.
As the data is plotted using past data, moving averages cannot be used in isolation as a trading signal. Rather they are often used in conjunction with other indicators to form an overall assessment of future trends.
The chart below shows that Bitcoin ( $75,894.00 ) is still below the key moving averages except for the 60-day MA, with BTC crossing above this period on October 25.
Despite a sharp sell-off at 14:00 (UTC) on October 31, BTC remains above the 60-day MA, and the “generational buying” uptrend remains intact, according to the data analyzed by CryptoSlate.
Source: Glassnode.com
Zooming in
Analysis of the five key moving averages on a year-to-date timeline shows Bitcoin ( $75,894.00 ) above the 60-day MA at present.
What’s more, since crossing above the 60-day MA, BTC has retested the 120-day MA on two occasions, being rejected both times. Bitcoin ( $75,894.00 ) would need to build on a daily close above $20,900 to recapture this level.
Source: Glassnode.com
Last week’s rally to $21,000 brought welcome relief and a renewed sense of optimism. However, Bitcoin ( $75,894.00 ) ’s failure to build on this for the next leg up has sentiment stuttering.
Combined with the ongoing macro uncertainty, it remains to be seen if the present plays out as a generational buying opportunity,
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