Rekt Capital: Bitcoin must hold higher levels

Bitcoin is trading around $78.027 and is trying to hold above the 50-week EMA, but it repeatedly runs into selling pressure whenever the price attempts to move higher. Analyst Rekt Capital states that Bitcoin needs to hold these levels for a longer period to demonstrate that there is real price strength behind it. If it fails to do so, he sees the possibility of a recovery rally within an ongoing bear market.

Bitcoin is available at OKX and Bybit.

In short:

• Bitcoin is trying to hold above the 50-week EMA, but upward attempts are immediately punished.
• Rekt Capital says Bitcoin needs to hold current levels for a longer period to prove price strength.
• As long as the price keeps forming lower highs on the long-term chart, a bear market rally cannot yet be ruled out, according to him.

Price meets resistance at the 50-week EMA

The 50-week EMA, the exponentially weighted moving average of the price over fifty weeks, is regarded by many analysts as a gauge for the long-term trend. Bitcoin is currently moving just above this level, but every attempt to rise further is reversed almost immediately.

Rekt Capital points out that this pattern has been repeating for several weeks. The price reaches the resistance zone but is unable to build a solid foundation there. That lack of a breakout makes the current movement unconvincing for now.

Bear market rally or genuine trend reversal?

Rekt Capital indicates that the situation could go either way. If Bitcoin remains above the 50-week EMA long enough, that is a sign that the market is genuinely getting stronger. But as long as the price continues to form lower highs on the weekly chart, he argues that a case can be made for a temporary rebound within a broader downward trend.

A bear market rally can show a substantial and rapid price increase, but is ultimately followed by a new decline. Rekt Capital states that this possibility remains open as long as Bitcoin fails to post sustainably higher levels. The coming weeks will be decisive in that regard.

Bitcoin falls slightly on day of analysis

At the time of the analysis, Bitcoin is at $78K, down 1.4% over the past 24 hours. Earlier this week, Bitcoin’s bull score jumped from 30 to 80 in one week, which some analysts saw as a positive signal. At the same time, recent data show that demand for Bitcoin increased by 170,000 BTC in thirty days, further fuelling the debate about the direction of the market.

Whether the current levels hold will become clear in the coming weeks, according to Rekt Capital. Only once Bitcoin posts structurally higher highs will the uncertainty about the market’s direction disappear.