Weekly Alpha: Bitcoin Key Levels to Watch
BTC is down 15.9% year-to-date, but long-term indicators suggest the bear market may be entering its final stages.
At Bitcoin Magazine Pro, our goal is to help you cut through the noise and understand what the data is really saying. This week, we’ll cover Bitcoin’s key technical levels after it failed to break above the 200 day moving average. Let’s go.
What’s Happening
Bitcoin Key Levels to Watch
With May now closed, we can review BTC’s performance across the monthly returns heatmap. In the context of the current bear market, a negative month is not especially surprising, but May’s decline was relatively contained, with BTC down 3.5%.
Figure 1: Monthly Returns Heatmap
Year to date, Bitcoin is now down 15.9%. That has been difficult price action for bulls, but our view at Bitcoin Magazine Pro remains unchanged: we believe Bitcoin is entering the final stages of the bear market. There may still be more challenging price action in the near term, but we expect BTC to end the year significantly higher than current levels.
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Where next?
In recent newsletters, we highlighted the risk of BTC failing to break above the 200DMA. After that rejection, we warned that price was likely to retrace back toward the previous range. BTC is now back at the top of that range, and at risk of falling back into it.
Figure 2: BTC Back at the Range
This current price action does not yet look strong. Without a decisive reaction from these levels, BTC risks moving back into the range, which would likely frustrate many market participants.
This is often the stage of the cycle where weaker hands capitulate and lose interest. For long-term mindset investors, however, these areas can provide excellent risk/reward.
Key levels to watch
The 200 Week Moving Average continues to climb and is now at $61,531. That is within the range highlighted in the previous chart
Figure 3: 200WMA Heatmap
Realized Price, the average cost-basis of all bitcoin in circulation, is currently $54,018. A move down to that level would require BTC to lose the current range, so it remains an important deeper support level to monitor.
Figure 4: Realized Price
However, long-term investors should also note that price remains below the 2 Year Moving Average, currently at $87,495. The Bitcoin Investor Tool uses this moving average to identify periods where Bitcoin is severely undervalued. Historically, investing during these green-zone periods has provided outsized returns.
So while many participants are focusing on the near-term and panicking, by zooming out we see that BTC is currently at very attractive levels.
Figure 5: Bitcoin Investor Tool, BTC in the green zone.
The near-term setup remains fragile, but the bigger picture is becoming more interesting. For patient investors, this is exactly the kind of environment where long-term opportunity emerges.
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The Bitcoin Magazine Pro Team.
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Disclaimer: This newsletter is for informational purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.
Rule 10b-5 & Section 17(a) warning letter sent
Looking forward to 45k end of Sep dump :)