Bitcoin tests crucial boundary: bear market or recovery?

Bitcoin is at a technically crucial point. Analyst rektcapital warns that the price is about to close the week below the 50-week EMA, an indicator that historically marks the difference between a bull market and a bear market. At the time of writing, Bitcoin is trading at $77.500, up 0.3% in the past 24 hours.

Bitcoin is available at OKX and Bybit.

In brief:

• Bitcoin risks closing the week below the 50-week EMA, an important technical threshold.
• Analyst rektcapital sees a weekly close below it as a potential sign of a continuing bear market.
• Recovery above this line is needed for additional upward momentum.

What the 50-week EMA means for Bitcoin

The 50-week EMA, the purple line on rektcapital’s chart, serves as a long-term indicator for market direction. In bull markets, this line typically acts as support, while in bear markets it acts as resistance.

rektcapital states that Bitcoin needs to reclaim this line as a support level to enable further upward movement. The price is currently around $77.000, just below that level.

Bear market confirmation depends on the coming weeks

According to rektcapital, a weekly close below the 50-week EMA is not in itself definitive proof of a bear market. What happens next is decisive. If Bitcoin then fails to reclaim the 21-week EMA, the green line, as support, the analyst considers that confirmation that the bear market persists.

Previously, Coinshares wrote that Bitcoin is likely to remain below $80.000 until the Fed provides more clarity on its interest rate policy. rektcapital’s technical analysis aligns with that: as long as the key levels are not reclaimed, the picture remains uncertain.

Other analysts, by contrast, are looking at positive signals. For instance, one analyst recently saw a so-called god candle as a signal for a new bull market, while Michaël van de Poppe earlier mentioned a price target of $81.000 to $83.000 as a stepping stone to an altcoin rally. The upcoming weekly close will reveal which scenario unfolds further.