Anika Begay
Over the past two years, Bitcoin (BTC) has produced a strong positive price performance, gaining over 300% since the beginning of 2023. In 2024 alone, the cryptocurrency market leader has increased by 40%, notably reaching a new all-time high of $73,750 in March. However, recent price developments indicate that Bitcoin’s upward price trajectory may undergo significant changes in the coming months.
The 200-day SMA signals that the price of Bitcoin is at a crossroads
In an X post published on Saturday, popular cryptocurrency analyst Ali Martinez shared that BTC price recently dropped below its 200-day simple moving average (SMA), which indicates that the asset is subject to a change in price movement.
For context, the simple moving average, one of the most common trading tools, is used to identify trends in price data over a specific time period, such as 200 days. As the name suggests, the indicator averages all price points over the given period, allowing traders to gauge the overall direction of the market.
Traditionally, when an asset’s price breaks above the SMA, it indicates an upward price move, although the reality of the expected price increase depends on the SMA’s time frame. Alternatively, when a token’s price falls below the SMA, it is a sell signal as a price drop is expected.
However, Martinez posits that BTC’s current drop below its 200-day SMA is temporary and represents a buying opportunity for investors, supporting the token’s potential to maintain its current uptrend. Although, in a situation where Bitcoin’s stay below the 200-day SMA becomes longer, the analyst predicts that such a development could start a bear market for the leading cryptocurrency.
Bitcoin Price Overview
According to CoinMarketCap data, BTC is trading at $59,995 with a 1.77% decline over the past seven days. This negative performance underscores the asset’s difficulty over the past month during which it has lost over 8% of its value, briefly falling below $50,000. However, community sentiment on Bitcoin remains largely bullish, indicating that many investors are backing the token because they believe it to be profitable in the long term.
The leading cryptocurrency has been repeatedly forecast to hit six-figure levels based on historical price data and other factors, including the Bitcoin ETF spot market and, more recently, potential changes in U.S. government policy on digital assets. However, Bitcoin’s short-term price targets for now stand at $62,000 and $70,000, both of which present significant resistance levels for the cryptocurrency market leader.
Featured image from Coinmonks, chart from Tradingview
