Bitcoin has remained above its 200-week moving average for another week, a level that has historically separated bull markets from secular bear markets. The questions currently dominating analyst discussion are the recent
The drop to $59,000 was either a cycle low or a temporary stop before a deeper decline towards $30,000 and $40,000.
Why bulls are getting optimistic
Analyst Michael van de Poppe made an important point about the recent development of the decline. The market has fallen significantly over the past week, but it’s usually the kind of move that gains momentum and accelerates further down. That acceleration never arrived.
Rather than continuing to fall, Bitcoin wiped out its recent lows and quickly regained its previous support level. Van de Poppe said price movements raise the possibility that the bottom of the cycle is already relatively close rather than still significantly lower.
“I don’t think $30,000 to $40,000 is a certainty,” he said, suggesting an aggressive downside target is less likely given market reaction.
A more bearish case still exists
A series of Elliott Wave analyzes outline a scenario in which Bitcoin is still in the early stages of a multi-year correction that could last four to five years and keep the asset range at much lower levels.
In this scenario, when the next bull market arrives, it will be a correction rather than the start of a true new bull market. It is still possible to generate returns of 2 to 3 times from the low, but it will be unstable and mentally exhausting, and there is a high possibility that there will be a sharp decline again after that.
The notable signal is the structure of the first significant recovery, no matter what the final low turns out to be. A strong rise in wave 5 would suggest that the bear market is over. A weak wave 3 movement suggests that a larger correction is still underway.
what to see
The immediate battleground is the 200-week moving average near $62,800. Holding it up will keep both scenarios open. A sustained break below this level would shift the odds to a more bearish multi-year outlook.
The reaction to support in the coming weeks will be more informative than a single price level. How Bitcoin rebounds and whether that rebound shows genuine strength or a rapid decline will determine how the scenario actually plays out.
