Bitcoin Sees a Price Level Above Its 200MA, Indicating a Support

The top crypto's recent breakout from the descending triangle pattern has reportedly placed it above the 200MA thereof. This presently works as a solid support level for Bitcoin.

Bitcoin price dropped suddenly on Monday morning, falling from $66,000 to $64,200 within a couple of hours. However, the world’s largest cryptocurrency found support at the 200-day moving average (200MA).

At the time of writing, BTC trades at $64,600, up marginally over the past day. But the flagship digital asset is still up by 8.6% over the past week.

Bitcoin price now trades above the 200MA, which is a key support level. This moving average is used by traders to gauge long-term trends. It is also a key price level for traders to gauge future price movements. But the 200MA is more than just a psychological support level. It is also a key price level that many institutional traders use to attempt to exit or enter positions.

At this current price level, many analysts are expecting a bounce. If the price of the leading crypto token holds and rebounds from this level, it could indicate bullish momentum, leading to further gains. A strong bounce at Bitcoin’s 200MA will bolster the bullish sentiment, encouraging buyers to shift towards long positions.

Despite the strong support, there is still a risk of a breakout to the downside of Bitcoin’s 200MA. If Bitcoin fails to hold this level, the next line of defense is the Ichimoku Cloud. This technical indicator provides further support just below the 200MA. The indicator is used to gauge resistance and support zones. In this case, it could act as a buffer to prevent further declines.

However, a breakout to the downside of both these indicators will indicate a shift towards a bearish trend. This will reportedly increase the chances of extended bearish momentum.

September Candle Close Could Result in Engulfing Candle Pattern

Another key aspect to note is the monthly candle close for September. According to data, if this month’s candle closes at a price above $64,628, it will create a bullish engulfing candle pattern on the 1-month timeframe.

The bullish engulfing candle is a strong technical indicator of a clear uptrend. Historically, if the September candle closes in the green, the next three months have shown strong gains.