Bitcoin Price Tests Support After “Death Cross”
On October 11, Bitcoin (BTC) experienced a downward break as it tested the $27,000 support level for the first time since the beginning of the month. This caused Bitcoin to erase all the gains it had made after September’s monthly close. The interplay between two moving averages (MAs) and a “death cross” was analyzed by popular trader Skew. In March, the 100-day MA crossed above the 200-day MA, signaling an upcoming uptrend. However, with the recent death cross, Skew predicts a potential squeeze and a retest of the 200-day MA before any upward trend can occur.
Resistance at the 200-day MA
Despite its early gains in October, BTC/USD has encountered strong resistance at the 200-day MA on the daily chart. Since the confirmation of the death cross on October 9, Bitcoin has lost approximately $1,000 or 3.4%. On shorter timeframes, Skew identified $27,300 and $26,800 as key levels to watch. Recovery above $27.3K would indicate strength, while a drop below $26.8K would suggest weakness.
Traders React to BTC’s Drop Below $27,200
Fellow trader Crypto Tony revealed that he had already shorted BTC as it dropped below $27,200. Trader Jelle also noted that current levels at $27,000 could result in either a recovery or a breakdown. He mentioned that untapped liquidity had been taken out and suggested that the market might be inclined to move lower.
Potential “Macro Low” Before Halving
The recent price behavior of BTC has led some analysts to predict lower levels for Bitcoin in the coming months. Trader Rekt Capital suggested the possibility of a return to $20,000 and highlighted the lack of a macro higher low on the BTC/USD weekly chart compared to late 2022. An accompanying chart indicated that Bitcoin could follow a similar pattern to the pre-halving year of 2019, with a potential macro low before the next block subsidy halving event in April 2024.
Hot Take: Bitcoin Faces Resistance and Potential Squeeze
Bitcoin’s recent price drop below $27,000 has tested its support level and erased previous gains. Traders are closely watching the interplay between moving averages and the death cross, which may indicate further downward pressure. Resistance at the 200-day MA remains strong, and key levels to watch are $27,300 and $26,800. Traders have already taken short positions as BTC dropped below $27,200, suggesting a bearish sentiment in the market. Analysts are also predicting a potential “macro low” for Bitcoin before the next halving event in 2024, with some even speculating a return to $20,000. Overall, Bitcoin’s price outlook remains uncertain as it battles resistance and potential squeezes.
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