Many investors are wondering whether it’s time to sell all their holdings. However, according to analyst Blockchainedbb, the short answer is no. In a recent tweet thread, the analyst shares a simple yet powerful tool for long-term investors: the 200-day exponential moving average (EMA).
What you'll learn 👉
Understanding the 200-Day EMA Strategy
The 200-day EMA is a widely used indicator by investors across various markets, including cryptocurrencies. The strategy is straightforward: investors typically buy when candles rise above the 200-day moving average and sell when the candles close below the EMA 200 on the daily chart and retouch it.
Blockchainedbb points out that there have been no deviations from this strategy throughout the history of crypto, making it a reliable tool for long-term investors.
Current Market Situation
At present, the market is below the 55-day EMA. Whenever candles go above the moving average, the 200 EMA tends to attract prices towards it. Therefore, if the 50 EMA is lost, a retouch of the 200 EMA is likely.
The analyst estimates that by the time Bitcoin (BTC) reaches the 200 EMA, it will be around the $42,000 to $43,000 range.
Potential Factors Affecting the Market
Several factors could contribute to a potential drop in Bitcoin’s price, including:
- Sell pressure from miners after the halving
- CZ’s sentencing
- Tension from the Middle East
These events could potentially lead to increased volatility and a possible retest of the 200 EMA.
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Show more +The 200 EMA as a Strong Support
Despite the potential for a price drop, Blockchainedbb emphasizes that the 200 EMA acts as a strong support level. Unless Bitcoin drops below this moving average, there is no need for investors to panic.
While the 200-day EMA strategy should not be the sole basis for making investment decisions, it serves as a valuable tool for long-term investors navigating the crypto market. Understanding the significance of this moving average and monitoring potential market-moving events enables investors to make more informed decisions about when to buy, hold, or sell their crypto assets.
As always, it is essential to conduct thorough research and consider multiple factors before making any investment decisions. By staying informed and maintaining a long-term perspective, investors can weather the market’s volatility and potentially benefit from the growth opportunities in the cryptocurrency space.
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