Bitcoin and the 100-day M.A.
Ever since BTC futures hit a high of $12,635 on August 17th the digital asset has been in a corrective phase, bringing down prices to just under $10,000. However, yesterday marked the third day in which pricing found support at the 100-day moving average. The 100-day moving average is one of the few major moving averages that has not served as support or resistance in the past but the high volume over those three days may show a shift in the makeup of Bitcoin traders. Shifting from true believers and the younger generation to a market with more institutional and large-scale investors (whales).
According to Satoshi Nakaboto (a pseudonym for the author of a daily Bitcoin blog), “As of now, there are 17,141 Bitcoin millionaires, or addresses containing more than $1 million worth of Bitcoin.”
This shift in the overall composition of holders of BTC could be the reason why this major moving average is now acting as support as it is widely used by mainstream stockholders.
We do see this correction as a short-term occurrence and a healthy one at that. Longer-term we remain bullish and do not see real resistance until $12,000.
Even if the 100-day moving average does not hold and we happen to see prices erode further it likely and critical for support to hold $9,500 coming in $400 below the major moving average. This is a key level due to the harmonics that form between $9,400 and $9,600. This level is even more crucial due to the descending top that took BTC over two years to overcome running right through these harmonizing retracements.
All in all, we may have seen a bottom in yesterday’s low and could see prices move up from here, if it does not pivot to the upside it is unlikely that BTC would re-enter into the downward wedge as it should now be acting as support. If it does not hold which we consider unlikely then a free-fall to as low as $6,600 could likely follow.