Bitcoin has lately returned above $40,000, much to the delight of investors. Given how low the digital asset has fallen following the market meltdown, this has been a long time coming. It is a key juncture on the path to another bull run. One thing is certain: the cryptocurrency has a long way to go before returning to bull territory, which market analyst Justin Bennett places at $45,000-$46,000.
As the market attempts to work its way towards this bull trend, clues indicate that a bull rally is not the only possibility for the digital asset in the near future. In reality, bitcoin recently triggered a trigger, indicating that the market is likely to tumble again before bulls regain control of the values.
Bitcoin has fallen below its 50-day moving average
Indicators such as the moving average and simple moving average can frequently advise investors and traders in the right direction in the market. For the most period, bitcoin has traded above its 50-day moving average, implying that the bull surge will continue, which has usually been the case. However, this time, the digital asset was unable to maintain a position above this critical indicator.
Bitcoin has fallen below its 50-day moving average for the first time in almost a year. Given that the cryptocurrency has only recently begun to show signs of a bullish rebound trend, this may not appear to be a significant enough event to warrant attention. However, it becomes more relevant data to examine when we look at what has happened in the past when this occurs.
Previously, Bitcoin had only dropped below its 50-day moving average three times. Every time this has happened, the result has always been the same: a crash. This was followed in 2014, 2018, and 2019. Once again, bitcoin has failed to trade above the 50-day moving average, and if history is any guide, BTC may be on the verge of a price drop.
Where Can I Find Selling Points?
There is never an ‘ideal’ time to sell bitcoin or other cryptocurrencies because it is nearly impossible to foresee where the market will swing. Putting buys and sells between indications, on the other hand, can assist one get near.
This trader believes the digital asset will continue to fall before the bulls control. This means that investors who do not want to own bitcoin for the long term must consider when it is best to sell their holdings before the price continues to fall.
Breakout sellers will target the current bullish trend in the current head and shoulders pattern, making it short-lived. The sweet spot will be the period between when these sellers arise and when the present bull run expires. Following that, the impending crash will see bears seize control of the market quickly.
