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After trading in a triangle formation for the second half of 2019 thus far, Bitcoin price finally broke down in a violent plunge that eliminated as much as 15% from Bitcoin’s value.
While the drop has turned many bulls to bears, and sent a ripple of fear and panic throughout the market, according to one prominent crypto analyst, this may be the final test of support before Bitcoin price goes into full bull mode.
Bitcoin Price Two-Year Moving Average Will Confirm Bull or Bear
Yesterday’s drop in Bitcoin markets took the price of the crypto asset from the high $9,000 range to as low as $7,800 on some crypto exchanges. The drop caused Bitcoin price to test its 200-day moving average, where it is currently resting at support.
Related Reading | Inverted Bitcoin Price Chart Is Bear Market Bottom Flipped Upside Down
The support line is an important one and will answer the question if Bitcoin is in a bull market or if there is a chance the bear market returns with a vengeance. Throughout the entire 2016 to 2017 bull run, Bitcoin tested the moving average a number of times but never broke below.
3/ *IF* we got down to that level, it would also align with a retest of the two year moving average, which I have tweeted about previously. This is an old chart that shows it retesting in previous cycles. pic.twitter.com/RYryOGtOYd
— Philip Swift (@PositiveCrypto) September 25, 2019
If the 200DMA gives way, crypto analyst Philip Swift says that there is yet another important moving average that could be tested, and could serve as the “final test before we go full bull.” The analyst cites the two-year moving average as critical support that was only retested just once following a bottom being set, unlike the 200DMA which was repeatedly tested as support.
Swift says that the moving average aligns with the 0.618 Fibonacci retracement level – a system commonly used to predict where crashed might reverse. The analyst expects the leading crypto asset by market cap to bounce at the two-year moving average in what he suspects will be the final test before the bull run truly begins.
He also concludes that Bitcoin is “clearly” in a “bull market” already, and shared a Bitcoin price chart with the Puell Multiple added to back up his theory of where it may be in its current bear-bull cycle.
5/ …because clearly we are in a bull market. Multiple charts including the Puell Multiple show approximately where we are in the cycle (A,B,C on the chart).
Feels like this is the final test before we go full bull, so hold tight everyone! 👊 pic.twitter.com/5oHaLsibGU
— Philip Swift (@PositiveCrypto) September 25, 2019
According to the Puell Multiple, Bitcoin is likely at the first real pullback and reaccummulation phase of its next bull run. This phase is when even the most stoic of crypto holders hands are tested and potentially shaken out of their long-term positions, as fears that the bottom actually hasn’t been set permeate the market.
Related Reading | Bitcoin Price Following 2016 Bull Market Reaccumulation Pattern
If this is indeed the final test before Bitcoin starts its full bull run, buying the dip would be a wise and profitable decision. But if Bitcoin price continues below its critical moving averages, the chances that the bottom isn’t actually in begin to increase.
Featured image from Shutterstock
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