Bitcoin: Hacked and now testing a critical 200-day EMA support
Following a massive 6.3 billion dollar hack on Binance, Bitcoin has fallen almost -5% overnight on October 29th, and is now testing the 200-Day EMA at $76,445.
Along with the 50-week EMA at 78,457.99 which has already been lost, both EMA settings have been major pivot points in the past for the king of cryptocurrency.
Simple read
1. Bounce here and rally, at the 200 day EMA (in purple), and Bitcoin maintains its bullish posture.
2. Lose this area however, and Bitcoin returns to a more bearish posture.
Broader level read: Bitcoin is still holding its multiyear rising logarithmic channel and 200 week EMA area (Bollinger Band set to 0.25 standard deviation).
Historically since 2019, the asset has found support here 4 out of 5 times after first initially breaking it to the upside.
Does that mean that the low is currently in?
No. We still have bigger concerns in the picture. First off, today is the Midterms Election for the United States. Bitcoin has historically fallen in the first 6 months after midterms, unlike the S&P 500.
Secondly, the BITBO NUPL chart is still not flashing a capitulation signal, where most Bitcoin holders are sitting in a loss and that usually signals a low is in.
Both these signals combined signal to me that it is not out of the picture for BTC/USD to break down from the weekly log channel.
Unfortunately, that does mean some potential turbulence is in the picture within a 6 month window for BTC and MSTR (MicroStrategy).
The saving grace is that the sample size is small, but nevertheless, more downside is still the higher probabilistic view.
Author
Zorrays Junaid
Alchemy Markets
Zorrays Junaid has extensive combined experience in the financial markets as a portfolio manager and trading coach. More recently, he is an Analyst with Alchemy Markets, and has contributed to DailyFX and Elliott Wave Forecast in the past.
