Bitcoin may have entered a bear market based on the fact that it failed to retrace the 200-day moving average as support. At the time of writing, Bitcoin traded below this crucial moving average for eleven days. The 200-day MA is currently at the $40,000 price level, which acts as a strong resistance level for Bitcoin.
Consolidating below 200-day MA Bitcoin not a good sign
In a Twitter comment earlier this week, Bitcoin and crypto analyst MagicPoopCannon pointed out that consolidating below the 200-day moving average for BTC is “not a good sign.” He also reiterated that this moving average is now an area of resistance and that Bitcoin could never regain its bullish momentum if it trades 3 days below this line. He explained:
Let it not rain on the bull parade, but BTC has now had seven [currently 11] days below 200 MA. Never in the history of BTC spent more than 3 days under 200 and reached all-time highs and that only happened in 2013. We are most likely in a bear market.
Bitcoin is also trading below the falling 6-month MA
In the continuation of his initial analysis, Magic pointed out that Bitcoin is also trading below the important 6-month moving average. He also warned that below this moving average, this month’s monthly close would confirm that Bitcoin is indeed in a bear market.
He shared his analysis of a potential Bitcoin bear market via the description and attached chart below.
BTC has confirmed the 200-day moving average (in purple) as initial resistance and could close the month below the 6-month moving average (in orange). None of this happened in a bull market, which makes it very likely. We are now in a bear market.