Bitcoin Falls Below the 50 Week Moving Average

Summary

In this video, the speaker discusses Bitcoin's recent weekly close below the 50-week moving average, marking a potential shift in the market cycle. Drawing comparisons to previous cycles, including 2019, the speaker highlights the possibility of a bear market, especially given Bitcoin’s behavior in post-halving years. Despite acknowledging the bears' case, they also point out that Bitcoin's movements could be slower and less euphoric this time. With the death cross recently forming, the speaker suggests that a drop to the 200-week moving average could be imminent, though they remain open to the possibility of a short-term rally. The analysis emphasizes the uncertainty of the market and the need to respect the data as it unfolds.

Takeaways

• 📉 Bitcoin has closed a weekly candle below the 50-week moving average, which historically signals that the cycle may be over in post-halving years.
• ⏳ The presenter emphasizes that two weekly closes below the 50-week MA would provide stronger confirmation of a cycle top.
• 🐻 Based on current conditions, there is an estimated 60–70% probability that the market top is already in.
• 📈 However, Bitcoin has often found local lows around death crosses, which means a short-term bounce is still possible.
• 🕰️ In previous cycles, if Bitcoin falls below the 50-week MA late in the cycle, it usually leads to a drop toward the 200-week moving average.
• 🔄 The speaker acknowledges both the bull case (no euphoria top this time) and the bear case (historical topping patterns), suggesting mixed signals.
• 📉 A scenario similar to 2019 is possible, where Bitcoin tops on apathy rather than euphoria and retraces around 50%.
• 📆 The presenter expects next year to be a down year overall, even if it begins with a short-term rally.
• ⛓️ If Bitcoin does rally soon and reclaims the 50-week MA, the probability of a continued bull cycle rises back to 50/50; if not, odds of a completed cycle increase significantly.
• 🔄 If the cycle top is in, Bitcoin may still experience a rally back up to the 200-day moving average, which typically becomes the lower-high point before deeper declines.
• 📊 Death cross behavior is a key signal: if a rally does not occur within a few days of the cross, it often leads to further downside.
• 🧭 The speaker stresses that nobody knows exactly what will happen, and traders must accept the market they have rather than the market they want.

Q & A

What does the recent weekly close below the 50-week moving average mean for Bitcoin?

Historically, a weekly close below the 50-week moving average in post-halving years has often signaled the end of a Bitcoin bull cycle. It suggests that the market might be transitioning into a bear market, with potential downside movement towards the 200-week moving average.

Why is the host comparing this cycle to 2019?

The host is drawing a parallel to 2019 because, like this cycle, Bitcoin's rise has been characterized by a lack of euphoria. In 2019, Bitcoin's rally peaked during a period of apathy rather than excitement, which could be similar to how the market is behaving now.

What is the significance of the death cross in Bitcoin's market cycles?

A death cross occurs when a short-term moving average crosses below a long-term moving average, often signaling a bearish trend. However, the host notes that in past cycles, Bitcoin has sometimes found a low near the death cross, which has led to short-term rallies or local bottoms.

What is the likelihood that the cycle top has already occurred?

Based on the current market behavior, the host estimates a 60-70% chance that Bitcoin's top has already occurred. This is largely due to the recent close below the 50-week moving average and the market's current late-stage cycle.

Why does the host suggest that the 200-week moving average could be important?

The 200-week moving average has historically acted as a significant level of support in bear markets. If the current cycle is indeed over, Bitcoin may experience a correction back to this level, similar to past cycles.

What does the host mean by 'trade the market you have, not the market you want'?

The host is emphasizing the importance of accepting the current market conditions rather than hoping for a particular outcome. Traders should adapt their strategies based on the actual market behavior rather than wishing for ideal conditions that may not materialize.

How could the scenario unfold if Bitcoin's cycle top is not in?

If the cycle top is not in, Bitcoin could experience a rally within the next few days or weeks, potentially pushing above $103K and leading to a new all-time high. However, this is contingent on Bitcoin quickly recovering above key moving averages and showing signs of strength.

What does the host mean by a 'fake-out' in the context of Bitcoin's price movement?

A 'fake-out' refers to a situation where Bitcoin initially breaks below a key support level, such as the 50-week moving average, only to rally back above it shortly after. This could mislead traders into thinking the market has reversed direction when it might not have.

What could a potential bear market look like for Bitcoin?

If a bear market is underway, Bitcoin could experience a significant drop, potentially as much as 70% from its peak. This would be followed by a rally to the 200-day moving average, after which the market may enter a prolonged consolidation or a lower high before continuing downward.

Why does the host recommend caution despite acknowledging that the bulls have a case?

While the bulls have an argument, especially with the potential for a rally from the death cross or other technical factors, the host warns against complacency. Given the historical patterns and the current market structure, it’s crucial to remain cautious and not assume that the market will continue upward indefinitely.