Bitcoin (BTC) is showing strong support, according to recent analysis, which has increased the probability of a bullish trend. In a thread on Twitter on October 17, Caleb Franzen, a senior analyst at Cubic Analytics, highlighted two moving averages that are currently acting as key battlegrounds for the BTC price. These moving averages are the 200-week simple moving average (SMA) and the 200-week exponential moving average (EMA), both of which have formed support and resistance levels since mid-August.
As of October 18, the 200-week SMA is at $28,277, while the 200-week EMA is at $25,744. Franzen believes that this is an important feature to note on weekly timeframes and is one of several bullish characteristics of the BTC/USD chart. He referred to the price attempting to use the 200-week moving average cloud as support, stating that this was a reason for his patience with BTC. He also mentioned that the bulls successfully holding the 200-week EMA was a great sign.
Franzen also mentioned the short-term holder realized price (STHRP), which is the aggregate on-chain price at which coins owned by younger investors last moved. The STHRP is currently around $26,900 and has been a significant metric in 2023 as it has acted as dynamic support and an indicator of an uptrend.
The analysis by Franzen does not suggest that the BTC price action will result in bull market-style gains. Instead, it indicates that constructive dynamics are taking place and improving the likelihood of a bullish trend. He emphasized that these indicators do not guarantee that the price will increase, but they do indicate positive developments.
These findings align with recent investigations into Bitcoin’s on-chain behavior. Despite some volatility, BTC/USD has remained up around 6% this week. Network fundamentals continue to surge to new all-time highs, and there is anticipation regarding BTC price action leading up to the April 2024 block subsidy halving.
One trader, Moustache, has been comparing Bitcoin’s performance in 2023 to that of 2020. He uploaded an illustrative chart that matches the COVID-19 crash in March 2020 with Bitcoin’s two-year lows post-FTX meltdown at the end of 2022. The accompanying commentary highlights the similarities and suggests that a big move could be imminent.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment decisions.