Worst Quarterly Bitcoin Crash In A Decade Closes Above Key Support
July 06 2022 - 3:44PM
NEWSBTC
Last week, when the June monthly candle came to a close in Bitcoin,
it also signaled the end to the second quarter of the year and its
first half. The top cryptocurrency suffered its worst quarterly
decline since 2011, but it ultimately held above a key support
level. Here is a closer look at the quarterly support level
currently holding in BTCUSD and how it has put in nearly ever major
bottom in the past. Bitcoin Crash Falls To Level Where Bear Markets
Bottom Throughout the 2018 bear market, a primary narrative giving
hope to bag holders, was the fact that institutions would
eventually get into Bitcoin and it would make all the difference.
Institutions did find their way into crypto eventually, leaving
many of them at risk of insolvency. Larger institutions are known
to take positions by quarter, and with two abysmal quarters in a
row of performance in crypto, institutions could be ready to get
back in. Related Reading | Bitcoin Monthly Tags Lower Bollinger
Band, Tool’s Creator Hints At Bottom The recent selloff took
Bitcoin price a lot lower than many would have expected – to the
tune of more than 50%, making it the worst quarterly close in a
decade. It also landed dead smack on the middle-Bollinger Band.
BTCUSD quarterly closes above the middle-SMA | Source: BTCUSD on
TradingView.com How To Read The Bollinger Bands And What Comes Next
The Bollinger Bands are a volatility measuring tool, designed by
John Bollinger in the 1980s. The middle-Bollinger Band is a
20-period moving average, with the upper and lower bands set at 2
standard deviations. Based on statistics, most price action takes
place within the upper and lower bands. Passing above or below the
SMA is considered a buy or sell signal. Each bear market in the
past has touched down on this same SMA ahead of the 2016 and 2017
bull run, and then again ahead of the 2020 bull run. Bitcoin price
is back at this line again, touching it for the second quarter in a
row. BTCUSD monthly touches down on the lower Bollinger Band |
Source: BTCUSD on TradingView.com Falling through the SMA would be
unprecedented in the history of Bitcoin. But Bitcoin has been doing
unprecedented things recently. For example, the same tool above
shows the first ever touch of the lower Bollinger Band on monthly
timeframes. Related Reading | Bitcoin Weekly RSI Sets Record For
Most Oversold In History, What Comes Next? In theory, price is
considered low relative to the history of the asset when prices are
at the lower end of the bands, while the opposite is true when an
asset is touching the upper bands. By this take, Bitcoin price is
potentially at the lowest point ever relative to monthly and
quarterly price action. Could this mean an unprecedented recovery
is soon on the way, or could Bitcoin ultimately lose the SMA and a
more catastrophic move results? Follow @TonySpilotroBTC on Twitter
or join the TonyTradesBTC Telegram for exclusive daily market
insights and technical analysis education. Please note: Content
is educational and should not be considered investment
advice. Featured image from iStockPhoto, Charts from
TradingView.com
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