Bitcoin could fall into a decline after hitting a historical high. “major bear market resistance level” CryptoQuant, a crypto-analytics firm, says that the 200-day average is a good indicator.
CryptoQuant stated that after six weeks of rallying, the currency has now reached its 200 day moving average at $82,400. It had fallen to $66,000 as recently as early April. report On Wednesday,
“The 200-day MA [moving average] was a major resistance in the 2022 bear market: the price resumed its downward trend after hitting it in March of that year,” It was said. “The current setup raises the question of whether history repeats.”
Recent predictions from traders predict a Bitcoin surge if the US Senate finally passes the CLARITY Act. Other analysts point to the additional US printing of money as an important factor for Bitcoin in this year. CryptoQuant signals indicate the opposite.
CryptoQuant said that traders’ margins of unrealized profits reached a record high on May 5 at 17.7%, their highest since last June. “potential selling pressure to take profits.”
“These margin levels mirror those seen in March 2022, precisely when Bitcoin last tested the 200-day MA before resuming its decline,” CryptoQuant said.
Bitcoin fallen After a strong rally that began in early April, the stock market has fallen 2.3% to $79,000. Traders have returned to more risky assets as they anticipate a possible easing of Middle East tensions.
Bitcoin’s latest drop came after the US Labor Department announced Wednesday that Bitcoin is now more sensitive to US economic conditions. producer prices jumped 1.4% Inflation rose to its highest level in 4 years in April.
Source: CryptoQuant
Related: Whale shorts $70M in crypto and tech: Should Bitcoin traders worry?
The report stated that traders have started to take profits. They cashed out nearly $1 billion worth of Bitcoins, or 14,600 Bitcoins, in May 4, a level not seen since the first week of December.
“Historically, spikes of this magnitude in bear market rallies have preceded local price tops,” CryptoQuant said.
Bitcoin’s current price is around $70,000, or the price average at which Bitcoin was transacted last.
“This level has historically acted as a key resistance-turned-support band during bear markets,” CryptoQuant said. “It represents the average cost basis of short-term traders and the level at which unrealized profit margins compress back toward zero, reducing the incentive for further selling.”
Other analysts have remained bullish on Bitcoin, with MN Capital founder Michaël van de Poppe posting on X on Wednesday The cryptocurrency “might see a fast move” If the US Senate passes the long-awaited crypto legislation dubbed CLARITY Act.
Arthur Hayes said that Bitcoin is a good investment. retaking its all-time peak The amount of 126,000 dollars was an “foregone conclusion.”
He said that a war between Iran and the US, and the competition over artificial intelligence in China and the US would cause the government to raise the money supply. This would result in inflation and push traders towards Bitcoin.
Magazine: eToro founder timed Bitcoin top perfectly due to belief in 4-year cycles
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: cointelegraph.com
