Bitcoin Faces Crucial Test as It Dips Below Key Moving Average

Bitcoin is currently navigating a pivotal moment, drawing significant attention from crypto analyst Caleb Franzen.

Recently, Franzen scrutinized Bitcoin’s chart, particularly focusing on its 200-day moving average, which has been a crucial indicator since late 2022.

Franzen’s analysis reveals a troubling trend: Bitcoin has recently dipped below this long-term moving average, a sign that typically signals a bearish phase. Historically, during strong bull markets, Bitcoin’s price remains above these critical averages.

However, Franzen is not overly concerned, noting that similar dips occurred in August and June, each followed by a rapid rebound.

READ MORE:

Analyst Predicts Bitcoin to Exit Bear Trap and Surge Toward $72,000

He likens Bitcoin’s current situation to these past instances, suggesting that if the cryptocurrency manages to rise back above the moving average, it could experience a significant rally.

In his assessment, Franzen explained:

“In bullish periods, Bitcoin’s price usually stays above its key moving averages. A fall below these averages often points to a bearish trend.”

He also mentioned that temporary declines below short-term averages are common in bull markets and are typically followed by quick recoveries. Franzen emphasized Bitcoin’s resilience in maintaining an upward trajectory despite facing short-term challenges.

Looking forward, Franzen is optimistic about Bitcoin’s potential, forecasting a possible rise to $175,000 in this market cycle.

Alexander Stefanov