Analysts: BTC's fall is a “hot money” shakeout, long-term bull market remains
- Bitcoin's long-term 200-week simple moving average ($54,750) remains well below its 2021 peak, a historical signal of growth.
- The recent sell-off was driven by short-term “hot money” rather than panic by long-term holders.
- Technical indicators are showing consolidation as the MACD turns positive, signaling an easing of bearish pressure.
Bitcoin's recent decline has cast doubt on the viability of the bull market. However, market data and key technical indicators point to a continuation of the overall upward trend.
Bitcoin's 200-week simple moving average (SMA), a widely followed indicator of the long-term trend, remains well below its 2021 peak, suggesting the macroeconomic bull market is not over yet, according to CoinDesk analysis.
Related: Bitcoin's bull market is just getting started: could $400,000 be the next stop?
Historical data shows that previous bull markets have ended when the 200-week simple moving average (SMA) rose to or challenged the previous cycle high. This occurred in late 2017 and again around late 2021 or early 2022. Currently , the 200-week simple moving average (SMA) stands at $54,750 , while Bitcoin's 2021 cycle high remains above it, supporting the notion that the market is still within its broader bullish structure.
However, CoinDesk notes that such a trend has only been observed twice in Bitcoin's history.
Why the recent sell-off was driven by 'hot money'
Bitcoin's price has fallen for the fourth consecutive session. This reflects a general trend: a muted reaction to positive news and increased sensitivity to negative factors.
The decline accelerated after the Federal Reserve's rate cut, which acted as a kind of “selling news.” According to CryptoQuant analyst CryptoOnchain, this surge was driven by short-term traders.
Read also: CryptoQuant: It's too early to call a Bitcoin bull market, but buying on the dip is still smart
Binance data recorded an inflow of over 10,000 BTC on October 30. This inflow was primarily from addresses where the coins had been on the exchange for less than 24 hours. An analyst described this as a “shakeup” caused by “hot money” rather than an outflow of long-term investors.
Bitcoin technical indicators show consolidation
At press time, the Bitcoin price was $109,779, down 0.94% over the past 24 hours, with a market cap of $2.19 trillion. The Relative Strength Index (RSI) is at 45.32, indicating neutral momentum but a slow recovery from oversold conditions. Meanwhile, the MACD line at 1077.40 is approaching the signal line at 1151.11, and the histogram is turning positive at 73.70, indicating easing bearish pressure.
Source: CoinMarketCap
If the RSI exceeds 50 and the MACD confirms a bullish crossover, Bitcoin could retest resistance in the $115,000 to $118,000 range. Failure to hold $108,000 could lead to a pullback to $102,000, signaling continued short-term consolidation within a longer-term bullish structure.
Source: cryptonews.net
