On-chain analyst PlanB, known for his S2F model, shares the levels indicated by the correlation of Bitcoin price with the 200-week moving average (200-WMA).
Bitcoin (BTC) price approached the 200-week moving average
Bitcoin (BTC) is currently trading sideways near the $41,000 level after rebounding from the strong support level over the past two days. With investors skeptical about buying at current levels or expecting further declines, PlanB, the inventor of the popular Stock-to-Flow (S2F) model, noted that the actual price of BTC is close to the 200-week moving average.
Kryptokoin.com, as we quoted PlanB on April 20th. He tweeted that the realized price of Bitcoin (BTC) is close to the 200-week moving average. Interestingly, the 200-week moving average heatmap is an important indicator by PlanB for predicting when BTC price will bottom out. In the last two Bitcoin market cycles, the BTC price has bottomed around the 200-week moving average.
Past 200-WMA contacts
Meanwhile, Bitcoin’s price near 200-WMA shows when a major rally in Bitcoin can be expected. Historically, at the end of 2016 and mid-2020, the Bitcoin price has risen drastically after the realized price hit the 200-WMA level. As the realized price is close to the 200-WMA again, a major bullish rally from current levels could be seen for the third time.
BTC The 200-week moving average heatmap can easily be used to forecast BTC price. The orange and red dots indicate a good time to sell Bitcoin as the market is overheating. Whereas the purple and blue dots near the 200-week moving average have historically been good times to buy.
BTC price builds bullish momentum
BTC price has risen significantly after the recent bloodbath in the crypto market. At the time of writing, BTC price is trading above $41,000, down nearly 2% in the last seven days and slightly higher in the last 24 hours.
Also, BTC whales took advantage of the ‘buy from the bottom’ opportunity to accumulate Bitcoin. The Nasdaq 100 index, which is closely followed by BTC, has also risen in the last two days.
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