Bitcoin is holding above its 200-week moving average for another week, a level that has historically separated bull markets from extended bear markets. The question that now dominates analysts’ discussions is whether the European Central Bank will do so
The drop to $59,000 was a session low or just a pause before a deeper decline towards $30,000 to $40,000.
Why are bulls becoming optimistic?
Analyst Michael van de Poppe pointed out something important about how the recent sell-off occurred. The markets have fallen significantly in one week, which is the type of move that usually builds momentum and accelerates further to the downside. This acceleration never arrived.
Instead of continuing lower, Bitcoin engulfed its recent lows and immediately regained previous support levels. Van de Poppe said price behavior increases the likelihood that the bottom of the cycle is actually relatively close rather than significantly lower.
“It doesn’t look like we’ll definitely see $30,000 to $40,000,” he wrote, noting that aggressive downside targets are becoming less likely given how the market is responding.
The bearish condition still exists
Elliott Wave analysis shows 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, the next rise, whenever it occurs, will be a corrective move and not the start of a true new bull market. It could still produce a return from the lows two to three times, but it would likely be choppy and mentally exhausting, followed by another big decline.
The signal to watch is the structure of the first big rebound from the final bottom, whatever it may be. A strong five-wave impulse may indicate that the bear market is over. Weaker three-wave movement may indicate that a larger correction is still developing.
What to watch
The 200-week moving average near $62,800 is the immediate battleground. Holding above it keeps both scenarios open. A sustained break below this level would shift the probability towards a more bearish multi-year outlook.
Reactions to support over the coming weeks will be more informative than any single price level. How Bitcoin rebounds, and whether that rebound shows real strength or quickly fades away, will determine which scenario actually plays out.
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