Crypto Investors May Have To Wait For A Year To See A Bitcoin Rebound
If you are anticipating a bitcoin rebound, you may have to wait months. According to Lisa Pauline Mattackal and Medha Singh's article for Reuters (July 19, 2022), this is the conclusion reached by a number of technical specialists searching for order in the chaos.
Photo Insert: Bitcoin has been basically stationary for almost a month, hanging near the 200-week moving average.
Bitcoin's decline since May, precipitated by economic anxiety, has sent it below its 200-week and 200-day moving averages, which are respectively $22,600 and $35,000. It has been basically stationary for almost a month, hanging near the 200-week moving average.
Valkyrie Investments, for example, claims that their analysis indicates an upward rise, but that the timing is uncertain.
"Historically, we've accumulated (around the 200-week average) for three to six months," said Josh Olszewicz, head of research at Valkyrie, in reference to a period of sideways trading preceding an upward price break.
Bitcoin spent nearly three months between late 2018 and early 2019 straddling the 200-week moving average. Olszewicz noted that under a more pessimistic scenario, a bitcoin rally may not occur for about a year.
In theory, moving averages smooth out wild price swings in order to clean up the signal. Traders utilize longer-term averages to determine the next levels of support and resistance. Nevertheless, chart analysis based on previous price patterns is not a perfect science, especially when it comes to the short, volatile history of cryptocurrencies.