Bitcoin’s Bounce Zone Shattered, Echoes Strategy’s (MSTR) Downtrend

This is a technical analysis post by CoinDesk analyst and Chartered Market Technician Omkar Godbole.

Bitcoin BTC$95,198.34 has gone the “Strategy (MSTR)-way”, falling below a key support to shatter the memory traders had of this level as a reliable bounce zone.

The leading cryptocurrency by market value fell nearly 10% in the seven days to Nov. 16, printing a big red candle that closed well below the 50-week simple moving average (SMA), according to data source TradingView.

The breakdown represents an invalidation of a major demand zone and a transition away from an entrenched bullish pattern toward increased caution and potential extended sell-off. Traders may reconsider their assumptions and shift tactics to sell the bounce rather than buy the dip.

That’s because the average had acted as a dynamic floor several times since early 2023, repeatedly holding strong as buyers stepped in around the level, powering a renewed upswing to new lifetime highs.

Looking back at the Strategy precedent, we observed a similar erosion of confidence and an extended sell-off following the breach of the long-held 50-week SMA. CoinDesk previously noted the bearish development in Strategy’s 50-week SMA breach, cautioning that Bitcoin could face a similar move.

The former support at the 50-week simple moving average has now turned into resistance, meaning any bounce will likely face selling pressure near $102,868. Sustained weekly closes above this level would be needed to signal a renewed bullish trend.

MSTR, the largest publicly-listed BTC holding firm, fell below its 50-week SMA in September nad has since extended the sell-off to $200, the lowest since October 2024.