Article By Jim Preissler
What a strange day yesterday was. Not 1 but 2 rather inexplicable sharp moves. Today sees Bitcoin (BTC) begin at $3,360, Ethereum (ETH) at $103.50 and Ripple (XRP) at $0.2890 and barely any movement! 12 hours later and we are static. There is no real easy way to make this sound more exciting than it was, so I shall refrain from doing so. What I have noticed today is the sudden plethora of fellow commentators and analysts that are now predicting doom and gloom, particularly for BTC, from current levels. I’ve advocated for a while that from both a technical and fundamental standpoint, the crypto market is currently lacking positives. The late 2018 rally has given back much of its gains and we start to wonder if those lows seen in early December are to be seen again. Maybe we need a further ‘clear out’ to the downside before a real longer-term base can be formed. If we do see that move, what’s going to be the trigger? Barring some sensationalist regulatory headlines, which I believe to be highly unlikely, it will be technically driven. And for me, the chart below, one which I have drawn attention to before, could well be the catalyst.
We’re a big fan of longer-term charts, especially in crypto, as short-term volatility due to liquidity constraints can make a mockery of even the soundest technical analysis. As such the weekly BTCUSD chart is about as long term as it gets in our digital world. It highlights the simple 200-day MA how long we have traded above this average. At the lows in December, we touched it and right now that average sits around $3,314. A weekly close below that level could make things interesting. Remember how I referred to the $5,800 level as the line in the sand last year? I believe this MA level could be just as significant. Time will tell.