In the last bull market, it was one indicator of a “buy the dip opportunity.”
“There’s likely going to be further decline and an accumulation period for altcoins.”
Merten says since Ethereum’s price drop in September the 200-day moving average is acting as a line of resistance for the second-largest cryptocurrency, not an indicator of support.
“Usually the 200-day moving average is a point where it’s time to buy equities and get bullish, right? But what we’re starting to see now during a bear market is that a lot of these altcoins, which have remained overbought in my opinion, are now starting to tread resistance around these moving averages. And it’s not just Ethereum here.
Cardano, since back here in October since equities and crypto really started to basically decline, we’ve seen that the 200-day moving average has started to act as resistance practically every time. Sometimes we get deviations above it, but it doesn’t hold and it rolls right back down.
I’m not negative here on [Cardano co-creator] Charles Hoskinson or Cardano as a project fundamentally, I’m just saying that the price action is telling me that I don’t really have any need to rush into this. Even if I wanted to dollar cost average or buy the dip, I should be setting my expectations lower here, potentially looking for it to come down to this previous range or maybe even a lower price range. We will have to see, right?
Again, I’m not here to say exactly where things are going to go. I’m not a Nostradamus. My key point here is to talk about setting our standards here and making sure that we don’t get caught here buying what we think is a dip.”
Merten also says Solana may dip to a prior support range and “it might take years to potentially recover” to current prices.
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