In the bearish scuffle that has recently characterized the cryptocurrency market, the BTC price is striving to maintain a foothold at the $28,000 mark. Despite the less than favourable current sentiment, strong confidence remains towards the currency averting a drastic retracement.
However, with its prolonged sideward streak under the threat of a breakdown, the BTC price action is on precarious grounds. Especially following the sharpening plots of Bitcoin bears spurred by the Federal Reserve minutes released on Aug. 16. This caused a slump in buyside interest, dragging the BTC/USD to nearly two-month lows of $28,300.
Given that the trading range has been narrow since June, this decline was quite significant, even though it amounted to less than $1000 in terms of the US dollar. As a result, market analysts and traders are girding up for further support retests, which may also include levels that haven’t been breached since earlier this year.
A continuous playback of the events over the past few months has returned focus to some pivotal long-term trend lines for Bitcoin market observers. These include notably, the 200-day and 200-week simple moving averages (SMAs). As James Straten, a researcher at a crypto insights firm, insists that these SMAs could potentially be game-changers for the bulls.
Interestingly, the 200-week SMA has historically served as a salient support line during downgoing BTC price pressure, loss of which usually marked the rock bottom of Bitcoin bear markets. Conversely, in 2022, Bitcoin experienced its lengthiest dip below the 200-week SMA.
When viewed from the perspective of support trend lines, the current Bitcoin spot price range’s significance becomes evidently clear. Certain trend lines, including simple (SMAs) and exponential (EMAs) moving averages, peculiarly form a constellation between $27,000 and $28,600.
Furthermore, there looms a psychological foundation at the $28,000 fortification which is firmly intact, as far as the broader market perception goes. As projected by some popular traders, the consistent support at this all-important threshold inspires a sense of security against any imminent meltdown.
Looking at reports from earlier this day, the brevity of the 100-day SMA, currently under test as a support, forms part of the Aug. 17 daily candle. From prior experience in 2015-2016, the careful foundation laid for a bull run to the last cycle’s $20,000 mountain peak, instils confidence that these “bullish supports” will hold their ground against the bears, hence mitigating any major apprehensions.