Bitcoin (BTC) fell to $67,500 on Friday, briefly trading below its 200-week simple moving average (SMA) for the first time in nearly three months. This level, considered a critical long-term indicator, has often functioned as a key support or resistance zone during market downturns and recoveries.
BTC tests long-term support at 200-week SMA
The 200-week SMA stands at $67,993, according to TradingView data. Bitcoin had not touched this benchmark since August 19, marking 11 weeks since its last test. Historically, periods where BTC has reclaimed this moving average on the weekly chart have led to sustained rallies, while dips below have signaled deeper corrections.
From March to October 2023, BTC fluctuated around the 200-week SMA before starting a new uptrend. A similar pattern emerged from June through mid-August this year, reinforcing the level’s significance for traders and analysts monitoring cycle trends.
Keith Alan, cofounder of crypto analytics platform Material Indicators, highlighted the convergence between the 200-week SMA and a notable resistance/support flip on Bitcoin’s weekly relative strength index (RSI). The RSI, a momentum indicator, had revisited the 41.5 mark—previously recognized as crucial support established in July.
Alan remarked that if Bitcoin’s weekly RSI were to fall below 41.5, a retest of the cycle low near $57,700 could be in play. In his analysis on X, he noted the importance of defending this technical support for maintaining bullish momentum.
“Losing 41.5 on Weekly RSI opens the door to test the cycle low at $57,700,” Alan explained, underscoring that holding this area may allow for a rebound.
Material Indicators is a cryptocurrency research and analytics firm known for its in-depth technical evaluations and real-time order book data for major digital assets.
Mini dictionary: Relative Strength Index (RSI): A popular technical indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in an asset. A value below 30 typically signals oversold conditions, while a value above 70 indicates overbought territory.
| Indicator | Current Level | Recent Range | Significance |
|---|---|---|---|
| 200-week SMA | $67,993 | $67,500–$67,993 | Major support/resistance |
| Weekly RSI | 41.5 | Below 41.5 signals downside risk | Momentum indicator |
| Cycle Low | $57,700 | Potential target if RSI breaks 41.5 | Key downside level |
US and Asian stock markets react to Nvidia CEO’s resignation
The decline in Bitcoin coincided with mounting volatility in global stock markets after Jensen Huang stepped down as CEO of Nvidia. Huang’s departure sparked concerns across the tech sector, leading to noticeable declines in Asian equities. Hong Kong’s Hang Seng Index closed down 1.55%, and South Korea’s KOSPI Composite dropped by 0.98%.
In the United States, stock market futures also edged lower. The Nasdaq 100 slipped by 0.2% amid speculation that Nvidia’s main competitors in advanced chip design could see increased capital inflows. Market participants suggested that this may enable rival firms to gain ground in the rapidly evolving AI sector.
Mark Franklin, head of multi-asset solutions for Asia at Manulife Investment Management, suggested that the resignation could lead to a shift in investor focus. He identified a potential rotation toward other chip design companies as market participants look for alternatives in the AI space.
According to Franklin, “Investor attention now shifts to advanced chip design companies, with the belief that competitors may close the gap following the leadership change at Nvidia.”
Despite overall market pressure, Nvidia shares traded 0.7% higher during pre-market activity, driven by reports of internal support for Huang’s reinstatement. An internal company post reportedly attracted more than 1,600 comments from employees backing his return.
Nvidia is a leading American multinational technology company specializing in graphics processing units (GPUs), and has become one of the central players in the global artificial intelligence and semiconductor industry.
Mini dictionary: Jensen Huang is the co-founder and former CEO of Nvidia, widely recognized for leading the company’s rise as a powerhouse in graphics and AI hardware development.
