Just after Bitcoin (BTC) crashed below support level last week, this week has become a new chapter for the coin. BTC has now bounced back from below $20k and surged past that. While BTC was attempting to march forward above the $21,500 price level on Tuesday, it encountered resistance and has now retraced ever since.
Investors and traders continue to be concerned about when this whole crash thing will end, and they are keeping their fingers crossed that BTC will get back on its feet as quickly as possible.
Bitcoin Faces Resistance at 200-Week Moving Average
Bitcoin would need to reclaim its 200-week moving average of $22,500 and turn it into support, according to Rekt Capital, a cryptocurrency market analyst, for it to be able to maintain the upward momentum that it has built up recently.
As this article is being written, the price of one Bitcoin is approximately $20,290, and its market capitalization is approximately 387 billion dollars.
Bitcoin Miner Capitulation
A lot has been going on with Bitcoin lately, both with the price and even with the news surrounding it. Just last week, it was reported that some Bitcoin Miners sold close to 9000 BTC to pay for the cost of operations. Apparently, Bitcoin’s Proof-of-work mining method is still a pain in the neck for miners. Moving on, a popular handle on Twitter, OnChainCollege stated that seeing miners capitulating should be what we should look forward to during a bear market like this. Plus, before Bitcoin could reach the bottom, it could still take months and also more declines.
“Miners capitulating is a sign that you want to see in bear markets. It could still take months, and more decline, to find that bottom.” – OnChainCollege
Bitcoin Supply At Exchanges
According to data that was provided by an on-chain data provider called Santiment, the supply of bitcoin at some exchanges is now at a level that hasn’t been seen in over three and a half years. The provider of the data also stated, “The ratio of Bitcoin’s supply continues to stay low at levels not seen since November 2018.” This is a strong indication that there will be a limited amount of selling in the future. In the meantime, supply on exchanges continues to skyrocket, which indicates greater buying power.
Conclusion
Long-term investors, seeing that Bitcoin is currently trading at a discount of 70 percent from its all-time high, have now taken this as a positive signal and are now purchasing more Bitcoin. Additionally, rather than waiting for Bitcoin to reach its lowest bottom at this point, long-term players can just start Dollar Cost Averaging (DCA) to profit 10 cents if Bitcoin returns to its all-time high and beyond. This is an alternative to waiting for Bitcoin to hit its lowest bottom. At this very moment, everyone is simply still watching to see how much longer BTC will continue to hold its support levels of $20,000, and we are all hoping that it will not go below that level.
