A widely followed analyst says Bitcoin may repeat an historical capitulation event if BTC fails to hold one key level.
The analyst pseudonymously known as Rekt Capital tells his 563,100 followers on X that if Bitcoin loses support at the 200-week exponential moving average (EMA) it may plummet in value similar to what occurred in 2018 and 2022.
“What would confirm additional downside for Bitcoin? Historically, a weekly close below the 200-week EMA (black) followed by a post-breakdown retest of the EMA into new resistance (red circles) has triggered additional bearish acceleration.
The 200-week EMA (black) represents the price point of ~$68,300. Therefore a weekly close below ~$68,300 followed by a bearish retest of it would likely position Bitcoin for a repeat of history with additional downside over time.”
The analyst notes that Bitcoin must convincingly breakout from the 200-week EMA resistance level to invalidate the likelihood of a collapse.
“Bitcoin has weekly closed above the 200-week EMA (black) for the second week in a row. This 200-week EMA is a key confirmation trigger for additional downside. So by Bitcoin weekly closing above it, it is staving off bearish confirmation.
However, this doesn’t mean Bitcoin is now in the clear. In fact, in the absence of any meaningful upside from here going forward, there is a risk that BTC loses the 200-week EMA in time. History suggests price won’t be able to produce much upside from this 200-week EMA before an eventual breakdown.”
Bitcoin is trading at $65,792 at time of writing, down 3.2% on the day.
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