Bitcoin News Today: Bitcoin Tests $112.8K SMA as Bump-and-Run Reversal Pattern Forms

Bitcoin is currently testing the $112.8K 200-day Simple Moving Average (SMA), with technical analysts observing the potential formation of a bump-and-run reversal bottom pattern. This classic chart setup, outlined in Thomas Bulkowski’s chart pattern encyclopedia, features an initial sharp decline—referred to as the “bump”—followed by a stabilization phase and a potential upward breakout. In Bitcoin’s case, the price experienced a sharp drop below the 200-day SMA, forming a clear “bump,” before entering a consolidation phase near the moving average [1].

The current price action shows two distinct retests of the $112.8K level, which traders interpret as potential validation of the support zone. BTC is now consolidating within Bollinger Bands, a sign of compressed volatility that may precede a stronger directional move. A breakout above the 200-day SMA, ideally with significant volume, could push the price toward the next key resistance near $117,000 [1].

Multiple moving averages are influencing the short-term outlook. The 200-day SMA is under pressure following a bearish crossover with shorter-term indicators, while the 21 EMA and 50 EMA remain below the price, acting as potential resistance. Traders are closely monitoring a breakout above the 200-day SMA, as such a move could signal a shift in long-term momentum [1].

However, the market remains in a delicate state. The failure to hold above $115,000 last week demonstrated the fragility of bullish attempts. Until Bitcoin records a decisive close above $117,000, bearish pressure could persist. Additionally, repeated tests of the 200-day SMA might weaken its reliability as support, especially in a volatile environment [1].

The current technical setup mirrors the bump-and-run reversal bottom described by Bulkowski, which is known for its effectiveness in identifying market turning points. The formation of a stable base following the sharp decline, combined with a potential breakout, aligns with the criteria for a successful reversal pattern. Analysts will be watching for confirmation through volume expansion, volatility expansion, and alignment of moving averages [1].

Ultimately, the success of this pattern hinges on whether Bitcoin can maintain strength above the 200-day SMA and break through the $115,000–$117,000 resistance range. If the price fails to do so, it may retreat toward support near $110,000, invalidating the reversal setup. The market is at a pivotal moment, with traders awaiting clarity on whether this pattern will lead to a sustained rally or a continuation of the range-bound correction.

Source: [1] Bitcoin Tests $112.8K SMA as Bump-and-Run Reversal Pattern Forms

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