Share this article

Technical Indicator Points to Bitcoin Price Bounce

The impending bearish moving-average crossover on the weekly chart has proven to be a contrary indicator in the past.

Updated May 11, 2023, 6:40 p.m. Published Jan 17, 2022, 12:51 p.m.
Bitcoin's price chart showing an impending bear cross between the 10- and 50-week moving averages. (TradingView)
Bitcoin's price chart showing an impending bear cross between the 10- and 50-week moving averages. (TradingView)

A lesser-tracked technical analysis indicator is signaling good times ahead for bitcoin.

  • The cryptocurrency's 10-week simple moving average (SMA) is about to dip below the 50-week SMA, confirming a so-called bearish crossover.
  • Historically, the negative signal has proven to be a contrary indicator, marking interim price bottoms and the end of bear markets, as the chart above shows.
  • The previous bearish cross dated mid-March 2020 occurred after bitcoin's coronavirus-induced crash to $4,000. Bitcoin picked up in the subsequent months, setting record highs above $20,000 by December.
  • Similarly, bitcoin bottomed out and rebounded at least 25% following the confirmation of the negative crossovers in early January 2020 and mid-June 2018.
  • Moving averages are based on backward-looking data. Thus, on weekly and monthly charts, bearish and bullish crossovers can be taken to represent oversold or overbought conditions and the potential for price bounce and bull market corrections.
  • That said, technical studies are unreliable as standalone indicators and seasoned traders prefer to read chart-based signals with money flow and fundamentals, which are currently signaling a low probability of a significant price bounce.
  • Bitcoin suffered a deeper drop following the confirmation of the first bear cross between 10- and 50-week MAs seen in September 2014.
Advertisement


STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters

More For You

Exchange Review - March 2025

Exchange Review March 2025

CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.

需要了解的:

Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.

  • Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
  • Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions. 
  • Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.

More For You

This article is created to test tags being added to image overlays

Consensus 2025: Zak Folkman, Eric Trump

Dek: This article is created to test tags being added to image overlays

需要了解的:

  • Ethena's USDe becomes fifth stablecoin to surpass $10 billion market cap in just 609 days, while Tether's dominance continues to slip.