Market

Bitcoin is nearing 50-week SMA support and signals a reversal

Over the past few weeks, Bitcoin and the crypto market as a whole have not performed the best after a 30% recovery, as expected by many industry experts.

Bitcoin slips to the 50-week EMA

Bitcoin is currently nearing traditionally strong technical support of the 50-week exponential moving average, which often acts as a turning point for assets moving in an uptrend.

Source: TradingView

Bitcoin is no stranger to the mentioned support indicator and fluctuated in this area as early as September, but it touched this line “unsuccessfully” and has recovered earlier than expected.

In July, BTC directly tested the indicator after losing more than 45%. After a brief period of consolidation around the indicator, the asset began a rapid rebound, reaching $ 51,000 in less than two months.

What if the support fails?

Typically, when strong support like the 50-week EMA fails, assets tend to stay in their current movement and move in the direction they were moving before hitting technical support.

Source: TradingView

The same happened in May 2018, when BTC fell below $ 6,500 – coinciding with the 50-week moving average. Then the largest cryptocurrency fell even further, reaching its lowest level since September.

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