bitcoin’s recent price movements have raised concerns among investors about what might happen next. However, by looking at key indicators such as the 200-week moving average, the Pi Upper Cycle Indicator, and the Golden Ratio Multiplier, we can gain insight into bitcoin’s potential support and resistance levels.
Bearish bias?
Over the past few weeks, the price of bitcoin has fluctuated, dropping as low as $53,000 before stabilizing in the middle of our newly formed range of $50,000 to $60,000. If this bearish price action continues and the price drops to lower lows, 200-week moving average heat map (blue line), a historically critical support level, is currently near $39,000 but is rapidly approaching $40,000 (white line). This round psychological level also aligns with bitcoin-investor-tool/”>The bitcoin Investor Tool (green line), which has also converged with the 200-week moving average, could serve as potential downside targets.
Nearby goals
Above the current price there are several important levels closer to the current price that investors should keep in mind. The Pi Cycle Top Indicator (upper orange line) suggests a crucial resistance level around $62,000, based on the 111-day moving average. The golden ratio multiplier (bottom orange line) indicates that the 350-day moving average, currently around $53,000, has been a solid level of support throughout this market cycle, especially since it is close to the technical support at $52,000 and the significant psychological support at $50,000.
More Chop?
In the short term, bitcoin could very well continue to range between the low-$50,000 region and the $60,000 resistance, similar to the range we had formed between $70,000 and $60,000 that led to fairly stagnant price action for most of 2024. Despite the recent dips, bitcoin’s long-term outlook remains promising. In the past, bitcoin has experienced similar periods of fluctuating prices before eventually reaching new highs. However, this process may take some time, potentially weeks or even months, before a sustainable trend reversal occurs after periods of bitcoin-portfolio/bitcoin-volatility/”>low volatility.
Conclusion
For long-term investors, it is important to stay calm and not get carried away by daily price changes. Overtrading often leads to bad decisions and losing money, and the key is to stick to a strategy, either accumulating at support levels or taking profits at resistance levels.
bitcoin's recent price action hasn't been ideal, but with simple technical analysis and a clear understanding of support and resistance levels, investors can prepare and react rather than overreact to natural market fluctuations.
For a deeper dive into this topic, check out our recent YouTube video here: bitcoin Price Action: What to Expect Next
