Recent weakness in technology shares and an increase in bond yields have put pressure on Bitcoin ( BTC). Some analysts are looking at a key average for bitcoin’s price to get clues on the next move.

Data from CoinDesk shows that the leading cryptocurrency in terms of market value was trading at $27400 at presstime, down 11% on its 10-month high reached on April 14 of $31,000. Bitcoin’s 50 day simple moving average is currently $27,244.

Alex Kuptsikevich is a senior analyst at FxPro. He believes that a possible violation of the SMA 50-day support could challenge the bullish sentiment.

Kuptsikevich wrote in an email that the market had lost its growth momentum. It is now testing whether the medium-term trend will continue to be strong by using the 50-day moving mean. A break below this level would bring into question the strength of the bull market, and a consolidation under $26,600 might be the prelude to a more serious decline.

The 50-day SMA has been widely used in both traditional markets and cryptocurrency. Crypto analysts tracked crossings above/below key averages to confirm bullish or bearish trends.

Charts show a potential break below the 50-day SMA would expose former resistance-turned-support at $25,200. (CoinDesk/TradingView) (CoinDesk/TradingView)

On Monday, sellers tried but failed to breach the 50-day SMA. If the breakdown occurs, the focus will shift to the next level of support at $25.200. This is the level where the upside was capped between August 2022 and Febraury 2023.

Katie Stockton is the founder and managing director of Fairlead Strategies. She believes that the SMA’s support could be fleeting, and may soon pave the path to a more serious decline.

Stockton wrote in a late-Monday note that “Bitcoin has tested the 50-day SMA. This is a minor level, where oversold short-term conditions will generate a temporary pause, before bitcoin continues lower towards key support ($25200).”

Oversold conditions are characterized by a significant and constant downward movement in price without any significant pullback over a certain period of time. Technical analysts use indicators such as the relative strength index (RSI) and stochastics to measure overbought/oversold condition on charts with different time frames.

If the SMA holds, then a new leg up in line with the bullish outlook will likely be resumed.

“The recent breakout [March move above $25,200] and positive weekly MACD support a bullish intermediate-term bias, with next major resistance near $35,900,” Stockton noted, using the acronym for “moving average convergence/divergence.”

Parikshit Miishra is the editor.