Our first post on Bitcoin, published on January 30th, 2022, ended with the following paragraph:
An aggressive view will say this: Bitcoin builds a bear flag on the daily and will flush down to below 30k, while taking out all the stops placed at/below the mid 2021 lows. Buyers will step in around the 202 weekly EMA, wherever it will be.
What’s Up (Down) With Bitcoin (BTCUSD)?
Bitcoin was trading a little under $40k and the following weekly chart was featured in the post:
Fast forward to last week.
That was brutal. In one week Bitcoin’s price broke below $30k and continued down to hit a low around $26,350 (data by CoinMarketCap).
If that price area sounds familiar than you are right on the mark.
Returning to the above chart, the 202-week EMA (blue line) does seem in that price area. However, that was in January. Let’s check where the 202-week EMA was last week.
Well, here’s the updated chart as of this writing:
The 202-week EMA, represents by the black line, was at $26,785.16. Buyers picked up BTCUSD in this price area and the absolute low was merely 1.6% below the support line.
The 202-week EMA line supports the body of the candle/bar. Technically, for the line to stay intact, the weekly price should close above the line. Piercing the line during the week and forming a low below the line does not affect it.
As described in our post on the Qs (Invesco QQQ ETF) from last Friday, May 13th, 2002: “Is This the Bottom for the Qs (QQQ)?,” the current bounce off the support line is not a guarantee that indeed we have seen the bottom. However, seeing buyers stepping in right there on and around the support line shows that this price level is and may still be an area of demand.