Well known Twitter investor and cryptocurrency enthusiast @Willywoo brought to attention an interesting development regarding the price of Bitcoin.

The relationship between price and moving average (MA) can help forecast future price movement.

Let’s take a look at this particular MA and see how the price has historically reacted to it.

Downtrend

The price of BTC is shown alongside the 128-day MA in the period from January 2018 to July 2019.

The moving average was touched seven times in 2018. These occurred in:

February (twice)

April

May

July

August

October

The MA was falsely breached five times before the price again dropped below it.

The last two times, the price respected it as resistance, before breaking out in March 2019.

Therefore, during the recent downtrend, the MA was not a good predictor of price movement, since it was breached five times, yet a bull run did not begin.

We cannot say with certainty that as long as BTC is below its 128-day MA, it is in a downtrend.

Uptrend

The price of BTC is shown alongside the 128-day MA in the period from October 2015 to January 2019.

The moving average was touched 12 times. These occurred on:

2016 (January, February, August, September (twice,) October)

2017 (January, March (twice,) July, September)

2018 (January, February)

While the MA was breached by a wick several times, BTC bounced upward every single time.

The relatively big sample size for 2+ years signifies that the 128-day MA is a good predictor of price movement during an uptrend.

Therefore, as long as the price is above it, we can say it is in an uptrend.

Will the price bounce at the current time and continue its uptrend? According to @Willywoo, it is worth exploring the possibility.

Do you think BTC will bounce on the MA? Let us know in the comments below.

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Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.

Images are courtesy of Shutterstock, TradingView, Twitter.