Bull Market

Bitcoin

when

James

After months of consolidation, Bitcoin’s price has lost key support levels that could signal the start of a new bear market.
While on-chain analysts are sounding the alarm regarding the high-cost basis of new Bitcoin holders, technical analysts note Bitcoin’s low price next to its 200-day SMA.
<h2 id="is-the-bull-market-over">Is The Bull Market Over?</h2>
The 200-day SMA, or “simple moving average,” is a trend line tracking Bitcoin’s average price over the previous 200 days.
Following Bitcoin’s surge to new all-time highs in March, Bitcoin’s price has remained mostly rangebound between $58,000 and $70,000, including a brief crash below to $50,000 in August. This consolidation period has given the 200-day SMA enough time to catch up to, and now surpass the market price.
Verified CryptoQuant author Adel Axel Jr. said the loss of this support “formally indicates a bearish sentiment.”
“Additionally, in recent days, increased leverage has been used on the top three exchanges,” he <a href="https://twitter.com/AxelAdlerJr/status/1825419374955569174" data-wpel-link="external" target="_blank" rel="noopener noreferrer nofollow">said</a> over Twitter on Monday. “The nearest support level is the 365-day SMA ($50K).”
Axel Jr. didn’t indicate a bear market had officially started, however: on Sunday, he <a href="https://twitter.com/AxelAdlerJr/status/1825078123089543280" data-wpel-link="external" target="_blank" rel="noopener noreferrer nofollow">called</a> Bitcoin’s five-month consolidation since March “healthy” involving no “massive stress-induced panic sells” while most early investors slowly took profits. “realized losses have exceeded profits, which often occurs at the end of a consolidation period,” he added.
Going forward, the analyst agreed that a “double test” near the $50,000 price level would be a “<a href="https://cryptopotato.com/4-reasons-to-be-bullish-on-bitcoin-in-2024-opinion/" data-wpel-link="internal" rel="noopener noreferrer nofollow">good scenario</a>.”
<h2 id="short-term-holders-now-underwater">Short Term Holders Now Underwater</h2>
Looking to on-chain data, lead Glassnode analyst James Check said Sunday that over 80% of short-term Bitcoin holdings are <a href="https://twitter.com/_Checkmatey_/status/1825328497067540737" data-wpel-link="external" target="_blank" rel="noopener noreferrer nofollow">now underwater</a> from when they were last bought. Short-term holders include anyone who bought their coins less than five months ago – a cohort of holders more likely to sell their coins when the market looks shaky.
“This is similar to 2018, 2019, and mid-2021 which signaled many investors were at risk of panicking and precipitating a bearish trend,” Check wrote.
That said, the actual magnitude of these losses is still quite shallow, meaning recent investors may not feel any panic quite yet. “Despite 80% of STH coins being in loss, the magnitude of Unrealised Loss is just 4% of the market cap,” Check continued.
The post <a href="https://cryptopotato.com/bitcoin-slips-towards-bear-market-after-losing-these-key-support-levels-analysts/" rel="noopener noreferrer nofollow">Bitcoin Slips Towards Bear Market After Losing These Key Support Levels: Analysts</a> appeared first on <a href="https://cryptopotato.com/" rel="noopener noreferrer nofollow">CryptoPotato</a>.

Bitcoin Slips Towards Bear Market After Losing These Key Support Levels: Analysts

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