Bitcoin trades near 200-week EMA; loss of support could spark 30–60% capitulation.
Summary
- Bitcoin trades around $68.4k, above the ~$68.3k 200-week EMA that marks the key cycle support line.
- In 2018 and 2022, a weekly close below the 200-week EMA followed by a failed retest turned it into resistance and led to sharp selloffs.
- Analyst Rekt Capital says multiple weekly closes above the EMA keep downside “unconfirmed,” but a breakdown from this level could again trigger accelerated capitulation.
A cryptocurrency analyst has warned that Bitcoin (BTC) could experience a significant price decline similar to events in 2018 and 2022 if the digital asset fails to maintain a critical technical support level.
The analyst, known by the pseudonym Rekt Capital, told 563,100 followers on social media platform X that Bitcoin faces potential downside risk if it loses support at the 200-week exponential moving average (EMA), according to statements posted on the platform.
Historical data shows that a weekly close below the 200-week EMA, followed by a post-breakdown retest of the EMA into new resistance, has triggered bearish acceleration in previous market cycles, the analyst stated.
“The 200-week EMA represents the key level,” Rekt Capital wrote, adding that a weekly close below it followed by a bearish retest would likely position Bitcoin for additional downside over time.
The analyst noted that Bitcoin has posted weekly closes above the 200-week EMA for two consecutive weeks, which has prevented bearish confirmation in the near term. However, the analyst cautioned that Bitcoin remains vulnerable without sustained upward momentum.
According to the analysis, historical patterns suggest Bitcoin may struggle to generate significant upward price movement from the 200-week EMA level before an eventual breakdown occurs.
The analyst stated that a convincing breakout above the 200-week EMA resistance level would be necessary to invalidate the likelihood of a price collapse.
Bitcoin experienced major capitulation events in both 2018 and 2022, when the cryptocurrency lost significant value following extended bear markets.
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