Bitcoin returns to 200-week trend line as analyst sees risk of $57.7K next
Bitcoin tests key support level while Asian markets and Nasdaq futures react to Jensen Huang's departure from Nvidia.
Quick Look
- Bitcoin fell to $67,500, testing its 200-week simple moving average for the first time in 11 weeks.
- Meanwhile, global markets reacted to the resignation of Nvidia CEO Jensen Huang, causing declines in Asian indices and Nasdaq-100 futures.
AI-generated summary
Why It Matters
The 200-week SMA is a long-term technical indicator often used to identify cycle lows for Bitcoin. Nvidia is currently undergoing leadership transition following Jensen Huang's resignation.
Bitcoin (BTC) fell to $67,500 on Friday, slipping below its 200-week simple moving average on its first test of the level in nearly three months.
Key points:
Bitcoin fell to its 200-week simple moving average at $67,993, marking its first interaction with the trend line in 11 weeks.
Material Indicators co-founder Keith Alan said Bitcoin could revisit $57,700 if its weekly relative strength index fell below 41.5.
Asian stocks and Nasdaq-100 futures fell following Jensen Huang’s resignation as Nvidia CEO.
BTC price falls back to 200-week simple moving average
TradingView data showed that Bitcoin last touched its 200-week simple moving average (SMA) on Aug. 19.
The 200-week SMA has served as a reference point for Bitcoin’s cycle lows, acting as support or resistance during bear markets. Bitcoin traded around the average from March to October 2023 and again from June to mid-August this year. Decisive moves back above it on the weekly chart have preceded sharper rallies.
In his latest analysis, Keith Alan, cofounder of crypto trading platform Material Indicators, flagged the 200-week SMA as having confluence with a resistance/support flip level on Bitcoin’s relative strength index (RSI).
Weekly RSI has returned to 41.5, a level that it established as support in late July after it spent several weeks attempting a breakout.
“Losing 41.5 on Weekly RSI opens the door to test the cycle low at $57.7k,” Alan wrote Friday on X, noting the bullish implications that successfully defending the support zone would have.
Stocks on edge amid calls to reinstate Nvidia’s Huang
BTC price downside accelerated on Friday as Asia markets reacted to the resignation and ongoing controversy around Nvidia CEO Jensen Huang. Hong Kong’s Hang Seng finished the day down 1.55%, while South Korea’s KOSPI Composite Index ended 0.98% lower.
US stock-market futures fell slightly, with the Nasdaq 100 falling 0.2% as analysis eyed a redistribution of capital into Nvidia’s competitors, preserving the AI trade.
“What you’re seeing in markets now is a bit of a rotation into other advanced chip design companies, on the assumption that this will enable other companies effectively to catch up,” said Mark Franklin, head of multi-asset solutions for Asia at asset manager Manulife Investment Management, told CNBC.
Nvidia stock was 0.7% higher pre-market, meanwhile, amid reports of growing support for Huang’s return. An internal post quoted by Wired drew more than 1,600 comments from employees.
What to Watch
AI outlook — possibilities, not facts
Bitcoin could revisit $57,700 if weekly RSI falls below 41.5.
Speculative · Within weeks
Open Questions
- Will Bitcoin hold the 200-week SMA support level?
- Will Jensen Huang return to Nvidia?
