Bitcoin’s price action suggests that the asset remains in a precarious position, and a recent report from ARK Invest says that short-term Bitcoin investors had no choice but to capitulate in August, as the percentage of Bitcoin supply in profit fell by 14 percentage points.
Although many traders view significant price dips as buying opportunities, at this point in the Bitcoin (BTC) halving cycle, a notable bearish move was Bitcoin’s price falling below its 200-week moving average (MA) for the first time since June 2023.
As shown in the chart below, the 200-week MA generally acts as a key support level during major downtrends, and ARK suggests that any future bearish catalysts could see the BTC price fall as low as $20,300, where its realized price currently resides.
Despite the rather dismal short-term outlook for the crypto market, a more optimistic view of Bitcoin’s dip below the 200-week MA would highlight the fact that dips below the realized price and the long-term moving averages presented cyclical buying opportunities. Investors who accumulated when the price dipped below both metrics in 2019, 2020 and early 2022 found themselves in deep profit within the next six months.
Analyst Ben Lilly recently alluded to a similar occurrence within the Bitcoin dominance metric, suggesting that “Bitcoin’s about to take the driver’s seat again.”
According to Lilly:
Author: Ray Salmond
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