Bitcoin traders don’t expect new highs until the 200-MA becomes support
2024.10.09 15:30
Since the beginning of October, Bitcoin’s (BTC) price has been consolidating within a roughly $3,400 range as the 200-day simple moving average (SMA) remained a resistance that BTC could not overcome.
Bitcoin has been stuck between its resistance level at $72,000 and $54,000 since dropping from its March 14 all-time high of $73,835. The direction of Bitcoin price is currently uncertain as the effects of an aggressively dovish Fed policy and stimulus measures in China fade.
BTC/USD daily chart. Source: TradingView
Let’s look at the reasons why Bitcoin price remains stuck today.
Bitcoin is trapped between the 50-day and 200-day SMA
On Sept. 30, Bitcoin price fell below the critical support provided by the 200-day SMA at $63,525, fueled by geopolitical tensions in the Middle East.
Several attempts have been made to reclaim this level, but each has failed to spark a broader price trend.
“Looking at Bitcoin on the daily timeframe, we now see a confirmation of 200-day SMA as resistance,” declared crypto analyst Alan Santana in an Oct. 8 post.
“BTCUSD tried to move above MA200 but failed. The session ended with a long upper wick and closing at the session’s low, a very strong negative candle.”
Santana was referring to Bitcoin’s price action on Oct. 7 when it rose above $64,000 before supplier congestion at this level forced a pull-back. This “confirmed the 200-day SMA” as resistance, with the 50-day SMA providing support.
BTC/USD daily chart. Source: TradingView
These indicators show that Bitcoin could continue the sideways price action in weeks to come.
Additional data from market intelligence firm IntoTheBlock helps to explain the ongoing stalemate between buyers and sellers. Its in/out of the money around price (IOMAP) model reveals that the price is currently between two significant levels.
The 200-day SMA at $63,525 is within the $61,843 to $63,655 supply zone, where approximately 1.3 million BTC were previously bought by 2.4 million addresses.
Bitcoin IOMAP chart. Source: IntoTheBlock
On the downside, the 50-day SMA at $60,777 is within the $59,958 and $61,70 buyer congestion zones, which provides strong support for the bulls. Roughly 1.8 million addresses previously bought approximately 866,330 BTC in this zone.
Data from CoinGlass shows high bid and ask orders building up on either side of the spot price. Currently, there are approximately $236.36 million ask orders between the spot price and $63,00. On the other hand, roughly $313 million bid orders are sitting between the spot price and $61,000.
Note these price levels are near the spot price, suggesting that there is a tug-of-war between the bears and the bulls.
Bitcoin 24-hour liquidation heatmap. Source: CoinGlass
Related: BTC price retests $62K as Bitcoin preps ‘very high impact’ month end
Bitcoin price volatility remains low
Bitcoin volatility has also remained low since the Aug. 5 sell-off.
Data from TradingView shows the Bitcoin historical volatility index at 5.48 as of Oct. 9, far below the year-to-date high of 14.74 reached on Aug. 5 and its 2021 peak of 42.7.
Bitcoin historical volatility index chart. Source: TradingView
Low Bitcoin historical volatility means that BTC’s price is less likely to fluctuate dramatically over a short period of time. This suggests that Bitcoin could remain rangebound for a few more weeks.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
