Bitcoin is once again showing signs of weakness as it has just retested the $34,300 price area a few moments ago. The latter price level is significant in the sense that it is the 50% retracement level of Bitcoin’s move from the March 2020 low of around $3,782 to the April 2021 peak of $64,584.
$28k – $27k is Bitcoins Next Level of Support After $30k
This new dip to $34,300 increasing the chances of Bitcoin retesting Wednesday’s low of $30k during the weekly close which is only a few hours away. Also worth mentioning is the fact that Bitcoin has failed to reclaim the 200-day moving average (green) as seen in the chart below.
Bitcoin’s failure to reclaim this important moving average is a confirmation of an ongoing correction that could soon result in BTC’s $30k breaking.
If the latter scenario plays out, the 61.8% retracement level at $27,111 is an area for a possible bounce as well as the $28,850 support witnessed in late January.
Bear Market Confirmed if the 200 Day Moving Average is Not Reclaimed
In an earlier Twitter commentary, popular Bitcoin and crypto analyst, MagicPoopCannon, also pointed out the significance of the 200-day moving average in determining whether BTC remains in bullish territory.
According to Magic, Bitcoin has spent too much time below this line, and chances of a bear market are increasing with each moment BTC spends below the moving average. An excerpt of his analysis can be found below.
BTC is failing to recover above the 200 day MA and is way below the 20 week. If it can’t recover, it will be the death knell for the bull market. Failure to recover above these averages is a classic early bear market signal…
The only times BTC was ever under the 200 day MA and recovered in a bull market, was in July of 2013 (3 days) and September of 2013 (2 days.) BTC is currently on its fourth day below the 200.