In the last 24 hours, the price of Bitcoin fell from 9200$ to 8550$, which is a decrease of about 7%.
Just as Bitcoin tries to retest the 20 week moving average for a second time, Crypto-Youtubers are going bearish and spreading FUD all over the platform.
But is this the time to talk about bearish scenarios of a 3000$ Bitcoin or is this just a normal correction?
The 20 weekly moving average provided support for the price of Bitcoin last week. Right now it stands at about 8380$. A retest of this important moving average is normal and if it provides support a second time we should be rather happy than fearful.
A bounce off the 20 week ma would show, that there is enormous buying pressure at this price levels and indicates an intact bull-market.
But what if?
But what if we actually break the 20 week moving average? Would this be a conformation of bitcoin going into a bear-market?
The answer is… No!
As I wrote in one of my last articles, I wouldn’t be surprised by bitcoin actually breaking the 20 week moving average, because this would make the masses sell their bitcoin.
It’s no secret, that bitcoin bounces off this key moving average, when it`s in a bull-market. This indicates, that if we break it… We are in a bear market.
Looking at the long term perspective, there is a strong support line, that just a few people take notice of.
The trend line acting as support showed its significance in early 2019 by being tested several times. Bitcoin also bounced off this support-line in December 2019, when the price formed a local bottom.
At this moment in time, the support-line is at 7650$.
If bitcoin breaks the 20 week ma, this could be a possible short term bearish target.
Bitcoin hitting this long-term support line and holding it as support, would validate my theory of bitcoin being in a two year symmetrical triangle, which is a bullish continuation pattern.
Summary
As long as bitcoin stays above the 20 weekly moving average or retests it as support, there is no reason for panic. Even breaking this key moving average would not mean the end for the bull-market, because there is strong support right below.
