Holding Your Breath For A Bitcoin Bounce? You May Have To Sweat For Longer

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Cryptoverse: Holding your breath for a bitcoin bounce

If you're waiting for a bitcoin recovery, you may have to sweat it out for months. That's the conclusion of some technical specialists seeking method from the madness.

Bitcoin's slide since May, swamped by economic angst, has knocked it below its 200-week moving average, at around $22,600, as well as its 200-day moving average around $35,500.

It's now been moving relatively sideways for more than a month, hovering close to the 200-week moving average.

Valkyrie Investments, for one, says its research is pointing to an upside move - but that it isn't clear when.

"Historically we've accumulated (around the 200-week average) for three to six months," said Josh Olszewicz, Valkyrie's head of research, referring to a period of sideways trading before a price break upwards.

Between late 2018 and early-2019, bitcoin spent nearly three months straddling the 200-week moving average.

In a gloomier scenario, though, bitcoin may not rally for about a year, Olszewicz added.

Moving averages smooth out wild price fluctuations to clean up the signal, or at least that's the idea. Traders use longer-dated averages to find the next support or resistance levels.

Yet chart analysis based on historical price patterns is far from an exact science, particularly when it comes to the young, fast and furious history of crypto.

Some other technical indicators are signaling a wide range of potential levels of support for bitcoin, ranging from $20,000 to $12,000 - suggesting that the world's biggest cryptocurrency could plunge anew.

This week, bitcoin is cruising just above its 2017 peak, but is over 68% below its all-time high of $69,000 hit last November.

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