Why This Is A Crucial Support Level


Bitcoin has rallied over the past 24 hours and is now at the $26,200 level. This is why this level is important for the asset.

Bitcoin 200 WMA & 111 DMA are both at $26,200 right now

In a new tweet, the analysis firm Glass snood after talking about how the various technical pricing models for Bitcoin may be interacting with the current price of the asset.

There are four technical pricing models relevant here, each based on different moving averages (MAs) for the cryptocurrency.

MA is a tool that finds the average of any given quantity over a specified region, and as the name suggests, it moves over time and changes its value according to changes in that quantity.

MAs, when taken over long ranges, can smooth out the quantity curve and remove short-term fluctuations from the data. They have made analytical tools useful because they can study long-term trends more easily.

In the context of the current topic, the relevant MAs for Bitcoin are 111-day MA, 200-week MA, 365-day MA, and 200-day MA. The first of these is called the Pi Cycle indicator, the 111-day MA, and is generally useful for identifying short- to medium-term momentum in the asset’s value.

The 200 week MA is used to find the baseline momentum of a BTC cycle as 200 weeks is equal to almost 4 years, which is about the length of BTC cycles in the common sense.

Here is a chart showing the trend of these various Bitcoin technical pricing models over the past year:

Looks like pairs of models have come together in phase in recent weeks | Source: Glassnode on Twitter

As shown in the graph above, these different Bitcoin pricing models have struggled to provide support and resistance to the price during different periods of the cycle.

For example, the 111-day MA recently turned into support, as the price retook this level during the fall in March of this year, as can be seen in the chart.

The 111-day and 200-week MAs recently stepped in, as their value is currently at $26,200. This is the level that Bitcoin has been finding support at for the past few days, so it appears that the base formed by these lines may be helping the price at the moment.

Glassnode notes that if a break occurs below this support region, the next levels of interest may be the 365-day and 200-day MAs. The first of these is the average annual price, while the latter metric is called the Mayer Multiple (MM).

The MM has historically been associated with the transition point between bullish and bearish trends for the cryptocurrency. When the 111-day MA supported the price back in March, the metric was in step with the MM.

From the graph, it can be seen that the recent 365-day and 200-day MAs look interesting, as their current values ​​are $22,300 and $22,600 respectively. This would suggest that the next major area of ​​support for the asset could be between $22,300 and $22,600.

BTC price

At the time of writing, Bitcoin is trading around $26,200, down 4% over the past week.

Bitcoin Price Chart

BTC has plunged during the past day | Source: BTCUSD on TradingView

Featured image from iStock.com, charts from TradingView.com, Glassnode.com

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