Bitcoin Approaches Its 4-Year SMA on This Key Market Metric – Here’s What You Need to Know
With Bitcoin price stuck below $70,000analysts are starting to mark this current performance as a bear market indicator. After several weeks of low pressure, many key metrics are starting to show signs of an ongoing correction phase, which reinforces the idea of a bear market situation.
Key Bitcoin Metric Drifts Towards Its 4-Year SMA
Given the latest signals from many Bitcoin market metrics, BTC’s ongoing bearish action does not seem to be over yet. Currently, some metrics show that the prime asset is close to a historically significant threshold, for example bear market phase.
This signal comes from Bitcoin Daily Price Analysis with SMA Multiplier, which is built around moving averages and multipliers, as report by Darkfost, data analyst and writer at CryptoQuant. The latest data shows that Bitcoin is back in the green on the chart and is approaching its 4-year SMA, which is currently positioned near the $57,500 price level.
The higher the standard deviation, and, therefore, the multiple of the SMA, the more overbought it is Bitcoin it seems. However, the expert emphasized that when the price approaches the 4-year SMA, the price of BTC becomes lower. To make these categories easier to understand, a color scale is used to show all of these.
In the past, this level has often served as a reliable signal of the last phase of each bear market, with the commodity trading at these levels for several months. According to the data on the chart, the market is approaching the bear market level, and Darkfost finds this current trend to be an interesting one that needs the attention of the market.
As Bitcoin approaches this level, the focus shifts to whether history will repeat itself or if a new dynamic cycle will enter. At the moment, the cryptocurrency is sitting in a decision area that shows the growing tension between persistent weakness and long-term measurement support.
Has The Price Of BTC Bottomed Yet?
As discussions about Bitcoin price down mount, Joao Wedson has it given details in the case we use BTC Long Term Owner Realized Price Bands. Historically, major bottoms have occurred when price reaches the -0.2 standard deviation levels of this key metric.
Wedson noted that this point is marked by a classic capitulation clauses and the last chance to buy the king of crypto before the new bull market begins. However, during the weekend, the behavior was different. A look at the chart shows that the price cannot sustain a move above the +1 standard deviation, suggesting continued and aggressive selling activity from the bears in these regions.
Currently, these bands act as natural support and resistance areas in all market cycles. The probability of the bottom of the structure increases significantly when the price approaches the worst values. Meanwhile, the data reveals areas of high risk and the emergence of asymmetry.
Featured image from Pixabay, chart from Tradingview.com
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