This is a technical analysis article written by CoinDesk Analyst and Certified Market Technician Omkar Godbole.
Bitcoin followed the “(MSTR) strategy” path, falling below key support to break the memory traders had of this level as a reliable rebound zone.
The leading cryptocurrency by market value fell nearly 10% in the seven days leading up to November 16, printing a big red candle that closed well below the 50-week simple moving average (SMA), according to data source TradingView.
This breakout represents an invalidation of a major demand zone and a transition from an entrenched uptrend to increased caution and potential prolonged selling. Traders might reconsider their assumptions and change tactics to sell the rebound rather than buy the dip.
Indeed, the average has acted as a dynamic floor on several occasions since the start of 2023, holding firm on several occasions as buyers approached this level, sparking a further rally to new lifetime highs.
Looking at strategic precedent, we observed a similar erosion of confidence and a sell-off following the breakout of the long-held 50-week SMA. CoinDesk previously noted the bearish development from Strategy’s violation of the 50-week SMA, warning that Bitcoin could face a similar development.
Former support at the 50-week simple moving average has now turned into resistance, meaning any rebound will likely face selling pressure near $102,868. Sustained weekly closes above this level would be necessary to signal a further uptrend.
MSTR, the largest publicly traded BTC holding company, fell below its 50-week SMA in September and has since extended the selloff to $200, the lowest since October 2024.
