Buying BTC at the 200 SMA, As Cryptos Retreat

Bitcoin (BTC) is testing the 200 SMA on the H4 chart now after the retreat below $29,000 earlier today

Skerdian Meta•Thursday, April 20, 2023•2 min read

Cryptocurrencies have shown resilience this year, as the uncertainty remains high due to the slowing global economy and lower inflation, with the banking crisis last month also helping the situation. But yesterday, Bitcoin (BTC) experienced a decline of more than 3% in less than an hour, causing BTC/USD to fall below $30,000. The price continued to decline and dropped as low as $29,000, according to data from CoinDesk.

While there was no immediate fundamental reason for the sell-off, an unusually large sell order on the crypto exchange Binance and an unexpectedly high U.K. March inflation figure of more than 10% may have impacted market sentiment. This led to a so-called long squeeze, which resulted in the liquidation of over $25 million in Bitcoin futures.

The decline in Bitcoin also caused a sell-off in the broader crypto market, with other cryptocurrencies such as ETHEREUM (ETH), and Solana (SOL) all experiencing losses of up to 10% in the last 24 hours. A well-known pseudonymous crypto trader pointed out that a 16,000 Bitcoin sell order, worth over $467 million preceded the drop and may have initiated the long squeeze.

“16K BTC is an unusual size to be market sold solely from Binance spot usually the kind of sale happens before bad news comes out,” @52kskew opined in a follow-up tweet. In the meantime, the regulatory scrutiny on cryptocurrencies continued to increase, as the Securities and Exchange Commission (SEC) reopened a proposal from last year that would focus on regulating Decentralized Finance (DeFi) exchanges. That might be having some negative impact on the crypto prices, as BITCOIN heads toward $28,300.

The price pierced below the 200 SMA

On the H4 chart above, we see that BTC was finding support at smaller MAs such as the 20 SMA (green0 when the uptrend was strong by the middle of March, but then the 100 SMA (green) took over as the trend slowed. Now, we will see if the 200 SMA (purple) will hold. We hope it does, since we decided to open a buy Bitcoin signal a while ago.

Bitcoin BTC Live Chart

BTC/USD

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.