Bitcoin Price Fails to Break 200D EMA. Will $52K Be Next?

The cryptocurrency market saw reduced volatility over the weekend, with Bitcoin Price stabilizing above $55,000. The easing of supply pressure earlier in the week allowed altcoins to find strong support and establish a local bottom. However, recent transfers of 700 BTC by the German government, coupled with Bitcoin’s struggle to break crucial resistance, have raised concerns about a possible prolonged correction.

Read too: Bitcoin Price Analysis: How Bull Flag Defends $1 Trillion Market Cap for BTC

Bitcoin Price Faces Supply Pressure as German Government Moves 700 BTC

Bitcoin Price | Tradingview

In the last 4 months, the Bitcoin The price trajectory has been mostly sideways with a slight dip on the daily chart. This consolidation is visually plotted with the formation of the flag pattern as the divergence trend lines offer strong resistance and support.

While in theory, the Bull flap supports the continuation of the uptrend, the divergence trend lines indicate market uncertainty and potential for intact support breakout. Amid the recent bear market, the price of BTC fell from $71959 to $53500 on Friday, representing a loss of 25.5%.

Interestingly, the downward pressure reversed precisely from the pattern’s lower trendline but failed to sustain above the 200D EMA. This trend-defining slope serves as a major resistance for Bitcoin buyers, and a failure to break above it could reinforce the continuation of the downtrend.

Read too: Spot Bitcoin ETFs saw $143 million in inflows on Friday. Are institutions buying the dips?

Furthermore, the German government transferred 700 BTC, worth approximately $40.55 million, to an unidentified address called 139PoP…H7ybVu, according to Arkham.

This transaction, conducted at 1:07 UTC+8, can be linked to a deposit address of an institution or OTC service. The German government’s current Bitcoin holdings amount to 39,826k BTC, valued at around $2.31 billion.

So, the BTC The price dropped 1.48% today to trade at $57,390, while the market cap dropped to $1.13 trillion. If the supply pressure from the fall of the Mt. Gox exchange and the US and German governments continues, the coin’s price could fall below the lower trendline.

The post-collapse drop could see Bitcoin’s value drop and seek support at a psychological level of $50,000.

Technical Indicator

• ADX: The ADX value at 38% indicates a prolonged decline that may promote sideways action before resuming the correction trend.
• EMAs: A potential bearish crossover between the 50 and 100 day periods Exponential Moving Average could accelerate supply pressure

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Frequently Asked Questions (FAQs)

The 200-day EMA is a technical analysis indicator that shows the average price of an asset over the last 200 days, giving more weight to recent prices.

ADX, or Average Directional Index, measures the strength of a trend. A value above 25 typically indicates a strong trend, while a value below 20 suggests a weak trend.

A flag pattern is a continuation pattern that resembles a flag on a flagpole. It indicates a brief consolidation before the previous trend resumes.

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