Analysts point out that Bitcoin is hovering near the “critically important long-term support line” and has been holding on for as long as 3 weeks, putting the long positions in the market on edge. However, as the world's largest Bitcoin holder, the publicly traded company Strategy (MSTR) has seen its stock price be the first to fall below this “safety line,” sending a strong bearish signal to the crypto assets market.
CoinDesk senior analyst and Chartered Market Technician Omkar Godbole explains that this “safety line” is the extremely critical “100-week Simple Moving Average (100-week SMA)” in technical analysis, which mainly reflects the average cost over the past two years. It is used by major market technical analysts to identify significant trend reversals, long-term support, or confirm crashes.
From the trend perspective, the 100-week moving average has continuously provided strong support for 3 weeks, halting the drastic fall of Bitcoin from its historical high of 126,000 USD.
Omkar Godbole describes this moving average as a “safety net” that successfully catches Bitcoin when its price falls.
If the coin price can rebound here, the market will expect this support to act as a “springboard,” becoming the starting point for a new wave of counterattack; conversely, once the coin price falls below the 100-week moving average, it may lead to a loss of confidence among holders, increased selling pressure, and allow the bears to further gain control, potentially expanding the downward trend.
What is concerning is that the stock price trend of Strategy (MSTR) seems to have already rehearsed the worst-case scenario. Please see the trend comparison in the chart below:
The price of MSTR fell below the 100-week moving average when it dropped to 220 USD in early November, and the selling pressure continued to expand, with the stock price plunging to 160 USD, a drop of over 60% from this year's high of 457 USD.
For Bitcoin long positions, this is a signal that cannot be ignored, as MSTR has previously led Bitcoin's trend multiple times. Earlier, when MSTR broke below the 50-week SMA, which is also viewed as a long-term trend watershed, it also indicated in advance that Bitcoin's subsequent market would weaken.
The current situation is very clear: Bitcoin long positions must defend the 100-week moving average at all costs.
If it can hold, this will become the starting point for a counterattack; if it unfortunately falls, Bitcoin may follow in MSTR's footsteps and sink into a deeper fall.
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Disclaimer: This article is for informational purposes only. All content and opinions are for reference only and do not constitute investment advice, nor do they represent the views and positions of the blockchain community. Investors should make their own decisions and trades, and the author and the blockchain community will not bear any responsibility for any direct or indirect losses incurred by investors' trades.
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Tags: 100 Week Simple Moving Average 100-week SMA Omkar Godbole Analysis Crypto Assets Market Coin Price Investment support Bitcoin Moving Average Trend
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