Still bullish, bitcoin to retest US$16,500 resistance

BITCOIN first began trading in 2010 and has since experienced many episodes of wild swings to the downside. Crashes of up to 50 per cent were a norm in the early days of bitcoin, but all the early moves were almost negligible compared to the current price of bitcoin.

Each asset class behaves differently to different indicators and parameters. Our study has shown that the 100-day exponential moving average appears to be the dividing line between the long-term bulls and the long-term bears. The general rule of thumb, at least for bitcoin, is if the price is above the 100-day moving average, then the uptrend is deeply entrenched, and vice versa. The 100-day moving average is a critical area to watch as it has been the backbone that kept the uptrend intact since June 2015. As long as it holds, the general uptrend should remain healthy.

In total, there were six various occasions where the 100-day moving average successfully reversed sharp sell-offs since 2015, shown by the highlighted areas, proving the importance of the 100-day moving average. Every rebound off the 100-day moving average propelled price into new record highs. The current price action around the 100-day moving average will be pivotal for deciding if the long-term uptrend remains intact or not.