Bitcoin tests 21-day SMA support

The world’s oldest and largest crypto by market cap is keeping its head above the psychologically-important $26k mark.

Bitcoin is also testing its 21-day simple moving average (SMA) for immediate support, having been stuck in a downtrend since July.

Bitcoin traders would be aware that each downtrend seen in Q2 and Q3 respectively, culminated in support at the $25k line.

Granted, the late-June spike was triggered by news of BlackRock’s Bitcoin ETF application, though all of those gains have been unwound since.

At the time of writing, Bitcoin has a quarter-to-date drop of 13.4%, while trimming its year-to-date gains to 59.1%.

Crypto world wades through near-term uncertainties

The sector itself is still reeling from the lack of liquidity following last year’s high-profile implosions by major market players such as FTX.

On the broader stage, risk-taking activities have been curtailed by the risks facing global financial markets, including the threat of “higher-for-longer” interest rates and stuttering economic growth for the likes of China, Europe, and the UK.

It may be many months before we see another bullish catalyst, either by way of the SEC approving a spot Bitcoin ETF, or the much-anticipated “halvening” in 2024.

Bitcoin bulls just have to remain patient in the interim.

Crypto sentiment downcast overall, though bulls still linger

Investors have pulled out more than US$ 160 million from crypto-linked exchange-traded products over the past month, according to Bloomberg data.

However, the likes of MicroStrategy – the largest publicly-traded holder of Bitcoin –added some US$150 million worth of Bitcoin to its stash since August 1st, according to a filing to the US Securities and Exchange Commission.

What's evident is that, although cryptocurrencies’ allure has broadly dampened and Bitcoin prices have been left rudderless for the time being, there remain opportunities for crypto aficionados to do some shopping.

Looking at the charts …

Near-term gains for Bitcoin may be met with immediate resistance around its 50-day simple moving average (SMA).

To the downside, if the 21-day SMA and $26k psychological level do not hold, another leg down may see the revisiting of $25k Bitcoin once more.

At that point, Bitcoin bulls will also be hoping that the $25k psychological level will trigger yet another rebound for the third time so far in 2023.