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<source: Tradingview, Binance>
Bitcoin witnessed another tumultuous week amidst the Celsius and 3AC debacle causing more havoc on the market, post the interest rate hike by the US Federal Reserve. BTC broke below its critical support of $20,000, which it had been barely clinging to during the past few days after the decline since June 10. Bitcoin reached a new 2022 low of $17,600 on Sunday.
At the time of writing, BTC is up by 5.75% from the previous day and trading at $20,800, reclaiming the previous support level. However, BTC's weekly close has occurred below the 200-week moving average (WMA) for the first time since March 2020, and for the fifth time in Bitcoin's history.
<source: Twitter>
Undoubtedly, Bitcoin's weekly metrics show it reaching oversold levels like never before. But BTC has never remained below the 200 WMA for a considerable period of time. Usually, a dip below this MA precedes a bounce, as is clear from the chart above.
The 200-W MA at $22,700 is currently acting as the resistance for the BTC/USDT pair. BTC's daily RSI stands at a low of 20. When combined with the 200-week average, it can be arguably said that BTC is reaching its market bottom and preparing for upward momentum. Also, BTC's MVRV (market value to realized value) currently sits at 0.97. BTC's MVRV has remained above 1 for the last 4 years and when it dipped below 1 in March 2020, BTC roughly recovered in seven days. As MVRV decreases, it indicates there is decreasing motive for selling in the market.
The long-term trendline support at $17,600 will continue to act as the crucial support for BTC in case of another dip. Any movement below this level will bring $16,500 support level into play.
BTC needs to move above the 200 WMA and claim the fib .236 retracement level at $24,700 to restore market confidence. Further downsides cannot be ruled out in coming weeks given the market conditions as bears continue to sell aggressively on overhead resistance levels.
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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.