A crypto market analyst has shared key levels to watch as Bitcoin (BTC) confirms a key level as support for the first time in months, opening the door to a continuation of April’s recovery.
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After closing the week above the key level, Bitcoin jumped 2.2% to break the $80,000 resistance for the first time since January. The major cryptocurrency has been trading between $74,000 and $79,000 for the past few weeks, failing to regain the upper limit of the range despite multiple attempts.
On Sunday, BTC closed above the $78,000 mark for the second straight week, confirming its 21-week exponential moving average (EMA) as support. Previously, analyst Rekt Capital highlighted the 21-week and 50-week EMA as two key levels for the cryptocurrency’s ongoing growth, explaining that these moving averages typically act as support during bull markets and strong resistance during bear markets.
In an analysis on Monday, the market watcher recorded that these levels “have not become ideal resistance” this time despite losing them as support after the transition before the decline at the start of the year.
Nevertheless, their divergence created a “general supply area” rather than a “general demand area” configuration, which is typically seen during bull markets. Now, “BTC closed above the EMA for the week, did a very volatile retest and closed above it again weekly.”
As a result, Bitcoin is positioned for growth, the analyst confirmed, adding that it has confirmation of price strength after last week’s close, but will need continued stability in the absence of further upside.
Should the trend continue, the analyst suggested that a jump deeper into the supply zone is likely, with the 50-week EMA currently around the $86,000-$87,000 area as the final stop to any upside fuse.
“In general, however, anything within this supply area is where price should decline and fail to recover further,” he warned.
BTC on the continuation of the trend or the peak of growth?
As Bitcoin attempts to regain the $80,000 level, Rekt Capital confirmed that the $82,500 region “does not have a defined role.” Significantly, this key horizontal area served as strong support and marks the base of the macro triangle formation that was lost during the February price decline.
“The first time the price reached it, we produced a decent bounce to new all-time highs. The next time the price was at the same level, we produced a much smaller rally, which is a sign that the support has already weakened. Now, $82,500 has no defined role. But we may be defining it as we speak,” the analyst said.
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He explained that a rejection without breaking this resistance would make this a price ceiling, forcing a retest of BTC’s old all-time high (ATH) area between $69,000 and $74,000, as we are only halfway through the bear market. In addition, Bitcoin failed to recover the macro triangle during this part of the cycle, after the price collapses.
Recht Capital pointed to invalidate the four-year cycle thesis and mark the end of the bear market, BTC would need to break above the macro triangle base on the monthly time frame and above its macro downtrend, which is above the $96,000 area.
Featured image from Unsplash.com, chart from TradingView.com
