This is a technical analysis post by CoinDesk analyst and Chartered Market Technician Omkar Godbole.
Bitcoin has gone the “Strategy (MSTR) way”, falling below a key support to shatter the memory traders had of this level as a reliable bounce zone.
The leading cryptocurrency by market capitalization fell nearly 10% in the seven days to Nov. 16, posting a big red candle that closed well below the 50-week simple moving average (SMA), according to data source TradingView.
The split represents an invalidation of a major demand zone and a transition away from an entrenched bullish pattern towards increased caution and potentially extended sell-offs. Traders can rethink their assumptions and switch tactics to sell the bounce instead of buying the dip.
That’s because the average had acted as a dynamic floor numerous times since early 2023, repeatedly holding strong as buyers stepped in around the level, fueling a renewed rally to new lifetime highs.
Looking back at the strategy’s precedent, we saw a similar erosion of confidence and an extended sell-off following the breach of the long-term 50-week SMA. CoinDesk earlier noted the bearish development of Strategy’s 50-week SMA breach and warned that Bitcoin could face a similar move.
The previous support at the 50-week simple moving average has now turned into resistance, meaning any bounce is likely to face selling pressure near $102,868. Sustained weekly closes above this level would be necessary to signal a renewed bullish trend.
MSTR, the largest listed BTC holding company, fell below its 50-week SMA in September and has since extended the selloff to $200, the lowest since October 2024.
