Bitcoin is under pressure, fluctuating around the 50-week moving average. Under the macroeconomic headwinds, the change of hands determines the long-term market trend.

Written by: Liu Jiaolian

Last Friday, the U.S. non-farm payroll data was unexpectedly strong, causing Bitcoin to drop below $80,000. Before one could even take a closer look, it climbed back up on its own. Over the weekend, Bitcoin swung back and forth around $80,000, like a pawn guarding this integer level. Last night, it finally broke down, and this morning it fell below $79,000.

Jiaolian observed the market early this morning and saw a barrier ahead— the 50-week moving average. Since November last year, every rally has failed to get close to this blockade. It is like a coffin lid, weighing down all attempts at recovery. In May, BTC encountered a setback at the 30-week moving average. This time, Bitcoin mounted a counterattack from around the 200-week moving average four weeks ago, soaring 22% in one breath, breaking through the 30-week moving average, and forcefully heading towards the 50-week moving average wall. Then it collided solidly with the wall.

The macroeconomic clouds overhead have not dissipated. After the employment report on Friday, market bets on a rate hike in September quietly rose to around 60%. This week, U.S. inflation data is set to be released. The increased probability of rate hikes, rising expectations of a stronger dollar, and tightening liquidity are never good news for risk assets.

Jiaolian and Xiaonuan sat in front of the screen, discussing and analyzing this 50-week moving average just like before.

Jiaolian: The script has changed, and so have the chips

Jiaolian believes that the focus of the debate is not whether $80,000 can hold, but rather how the script behind this 50-week moving average will unfold.

From a macro perspective, this round of scripting is somewhat similar to two years ago but also different. In August two years ago, the yen carry trade collapsed, and global risk assets were severely washed out. Many people still vividly remember that scene. Now the same script is being played out again, as Japan intervened with nearly $100 billion in August to support the yen, yet after the intervention, the yen couldn't even surpass the barrier of 154.

The same winds are blowing, but this time they haven't flipped Bitcoin over. The difference this time lies in the chips.

Two years ago, what lay above $80,000 were speculative chips, leverage, and short-term funds that reacted at the first sign of movement, blowing away like leaves in the wind. Now, a new group has taken over. They have moved coins from exchanges to cold wallets and view their positions as long-term assets, becoming increasingly immune to interest rate hikes, inflation, and every piece of bad news. The transfer of chips from speculative to real creates a more solid foundation for price.

Jiaolian feels that the tug-of-war at the threshold is ultimately a repeated measurement and test of the chips.

Xiaonuan: An Interpretation from the Moving Average

Xiaonuan spread out a bunch of charts next to her. She pulled up the past movements where the 50-week moving average had been tested repeatedly over the years and retrieved data on on-chain chips, then provided a scenario analysis.

She roughly estimated that since the 50-week moving average has been the ceiling for bear market rallies over the years, this time colliding with it, a pullback is almost predictable. The first key support is at the 30-week moving average, around the $70,000 line, which is a common position for confirming pullbacks after a sharp rise and is likely to be tested with around a 60% probability. If market panic deepens, it might continue to drop to the 200-week moving average, around $65,000, which is the floor for past bear markets, with about a 20% probability. As for a more pessimistic scenario, dropping below the 200-week moving average would require a black swan-level event; from current data, there are no signs of such a trigger.

Xiaonuan also said that if probabilities are to be placed like bullets, the bulk should rest on that middle support, leaving a bit for the deepest position as insurance is enough. There's no need to put all ammunition into depths that may never be reached.

As for a direct breakout scenario, Xiaonuan hypothesizes that the key lies in the inflation data. If the data unexpectedly comes in low, interest rate hike bets might recede, and if the weekly close is stably above the 50-week moving average, then based on the inertia of this round of rally, there could be considerable upward space remaining. The probability of this scenario is about 20%.

Jiaolian: The threshold is for testing

After listening, Jiaolian found Xiaonuan's interpretation quite reasonable. However, Jiaolian tends to approach price fluctuations more calmly, without falling into the obsession with pullbacks or chasing rises.

The concept of resistance lines has never been an objective truth but rather a psychological gathering. When more people are observing and many are skeptical, games naturally unfold around the moving averages.

$80,000 is a threshold, the 50-week moving average is a threshold, and the 200-week moving average is also a threshold. Each time the market hits and falls back, it is testing the distribution of chips and the psychological state of holders anew. When facing danger, not changing color is not because it is fearless, but because the hand has already changed cards. In this instance, whether it holds $80,000 or pulls back to $70,000, as long as the chips remain, time stands on the side of long-term investors. What Jiaolian is betting on is never just a single breakout but the next cycle and the overarching historical trend that transcends cycles.

Whether pulling back or breaking through, they are merely tuition fees paid to time. The white dew has passed, and a burst of autumn rain brings coolness. The dew of tonight is white, and the moon is bright like the homeland.