Hey guys,
Maybe you have followed the recent tweets from Murad Mahmudov, a Princeton graduate and crypto analyst? He was explaining that Bitcoin could plunge down to $1700 in the next 6 months.
He explains why he believes the famous 200-Week Moving Average support from the last bear cycle could be soon broken.
We have released a note with our partner Blockstars Capital:
"Moving Averages are a significant tool in Technical Analysis. The current weekly 200 day Moving Average has acted as support to the market. Whilst this level may break, Blockstars feel you cannot use previous Technical Analysis in Bitcoin to predict where the market will move to this time.
Below are a few reasons:
- Cycles 1,2 and 3 were experienced in an immature market. There was no institutional mechanism to go short such as CME and Cbot Futures. This market now consists of different investors with different strategies. There is a more algorithmic trading and institutional investors in this space who allocate for other reasons then one technical trigger.
- 300 and 400 day Moving Averages are not historically used in traditional markets.
- The suggested price does not consider the effects of mining costs and the algorithm that determines the supply of bitcoin
- Does not consider that significant custodial and regulation developments (ETF’s etc) that could establish a bottom in the market and ignite a new bull run. At any stage fundamental news could trigger a significant reversal in the market
When an immature market is solely based on retail speculation, patterns may evolve as seen in Cycles 1,2 and 3 as there is nothing fundamental supporting the price. Blockstars feels this is no longer the case with Bitcoin. This market can no longer be traded purely on Technical Analysis. Whilst it is an important signal, it's something that should be used in conjunction with fundamental analysis before deciding to allocate."
You can find all the tweets here with the original note on our blog:
https://predicoin.com/blog/could-bitcoin-break-200ma-and-be-down-to-1-700-not-so-sure-What do you think of the current 200 day moving average of Bitcoin?
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