Over the past two years, Bitcoin (BTC) has shown strong positive price performance, gaining over 300% since the start of 2023. In 2024 alone, the crypto market leader is up 40%, hitting a new all-time high of $73,750 in March. However, recent price developments suggest that the upside trajectory of Bitcoin price could change significantly in the coming months.
200-day SMA signals that Bitcoin price is at a crossroads
In an X-post on Saturday, well-known crypto analyst Ali Martinez shared that the price of BTC recently fell below its 200-day moving average (SMA), indicating that the asset is undergoing a change in price action.
For context: The simple moving average, one of the most common trading tools, is used to identify trends in price data over a specific period of time, such as 200 days. As the name suggests, the indicator represents the average of all price points in the specified period and allows traders to estimate the general direction of the market.
Traditionally, when the price of an asset crosses the SMA, it indicates an upward price change, although the reality of the expected price increase depends on the time frame of the SMA. On the other hand, when the price of a token falls below the SMA, it represents a sell signal as a price decline is expected.
However, Martinez believes that BTC’s current drop below its 200-day SMA is temporary and represents a buying opportunity for investors, which underscores the token’s potential to maintain its current uptrend. However, in a situation where Bitcoin stays below the 200-day SMA for an extended period, the analyst predicts that such a development could trigger a bear market for the leading cryptocurrency.
Bitcoin Price Overview
Based on data from CoinMarketCap, BTC is trading at $59,995, down 1.77% over the past seven days. This negative development highlights the asset’s struggle over the past month, during which it lost over 8% of its value and briefly fell below $50,000. Nevertheless, the community sentiment towards Bitcoin remains largely optimistic, indicating that many investors support the token as it will prove profitable in the long term.
Based on historical price data and other factors, including the Bitcoin spot ETF market and most recently potential changes in U.S. government policy on digital assets, the leading cryptocurrency has been repeatedly predicted to hit six figures. However, short-term price targets for Bitcoin currently stand at $62,000 and $70,000, both of which represent significant resistance levels for the crypto market leader.
Featured image by Coinmonks, chart by Tradingview
