Bitcoin Struggles Ahead of Weekly Close

Bitcoin’s price has barely managed to stay above $50,000 as it approaches the weekly close on Sunday, struggling to recover from a significant low not seen in ten months.

Key Points

• Bitcoin’s price outlook continues to be bearish, with traders still reeling from the recent downturn.
• The CME futures gap might offer some temporary relief as the new week begins.
• Research highlights that Bitcoin is still losing support, indicating a prolonged bear market.

Price Analysis: “History Seems to be Repeating Itself”

According to TradingView data, Bitcoin has remained under $80,000, dropping more than 6% recently. It’s evident that many traders are feeling the pinch as Bitcoin has lost critical support levels, like the market average of around $80,700.

Traders are eyeing $74,400 and $49,180 as crucial points for potential downside during this bearish period, as noted by an analyst on X. Another trader, CryptoBullet, pointed out the troubling loss of the 21-week exponential moving average (EMA), a signal that has often preceded bear markets in the past.

Another analyst, Recto Capital, echoed similar sentiments, mentioning that typically, further declines follow such EMA crossover events. Since this crossover happened, Bitcoin has decreased by about 17%, falling from $90,000 to $78,000.

This crossover included both 21-week and 50-week EMAs, last occurring in April 2022. Hopes for a quick rebound now hinge on a newly identified “gap” in the CME Group’s Bitcoin futures market, often seen as a “magnet” for price movements, with the nearest gap around $84,000. Trader Kira believes this gap may likely be filled in the coming weeks.

Concerns of a Long-Term Bearish Phase

Looking at the broader picture, on-chain analysis suggests a strong risk-averse sentiment in the long term. Insights from CryptoQuant reveal that Bitcoin’s spot price trading below the realized price for those holding it for 12 to 18 months could signal deeper trouble ahead.

The “realized price” refers to the average cost when Bitcoin was last moved. It’s noted historically that when prices linger below this threshold, market behavior shifts toward a sustained bearish phase rather than a quick recovery. This trend has led to concerns that if these price levels persist without improvement, the market may face a prolonged downturn.

Overall, the combination of prices below the realized cost, negative unrealized gains, and stagnating growth trends might indicate that Bitcoin is indeed heading into a lengthy bear market.