Bitcoin's Weekly Close Crucial for Bullish Continuation

Bitcoin is currently at a pivotal moment, with market observers and analysts closely monitoring the closing of this week’s candle. This event could either confirm the strength of the ongoing recovery or signal the beginning of a more significant corrective phase. EGRAG Crypto, a respected market analyst, recently shared an analysis on X that highlights a historical pattern which could provide insights into Bitcoin’s future trajectory.

EGRAG Crypto draws a parallel between Bitcoin’s current situation and the 2021 cycle. During that bull run, Bitcoin experienced two drops below the yellow moving average. The first drop was brief, and Bitcoin quickly recovered, forming a double top. However, the second drop was more severe, and although Bitcoin briefly bounced back, it failed to sustain momentum and fell below the trendline just one week later, leading to a prolonged bear market. The current chart suggests that Bitcoin may be repeating this pattern, having recovered after an initial drop below the key moving average. The question remains whether this second recovery will mirror the resilience of the 2021 double top or unravel like the final leg before the last bear cycle.

EGRAG emphasizes the importance of the weekly candle’s closure. A strong bullish close above the moving average would significantly boost market sentiment and support the idea that Bitcoin could be headed toward a parabolic rally, potentially targeting the $150,000 range. Conversely, a weak or bearish close could indicate waning momentum and increase downside risk. To validate the trend, EGRAG is examining five separate oscillators, likely including key tools such as the RSI, MACD, stochastic RSI, volume-based momentum indicators, and moving average crossovers, all of which are widely used by technical analysts to gauge potential market direction.

Bitcoin’s current indecision is occurring against a backdrop of mixed macroeconomic signals. Increasing institutional adoption and the recent launch of spot Bitcoin ETFs are pushing long-term sentiment into bullish territory. However, lingering inflation concerns, uncertainty surrounding Fed policy, and profit-taking by short-term holders are keeping upward momentum in check. In this context, the importance of the weekly candle cannot be overstated. A bullish confirmation could reignite retail enthusiasm and bring sidelined capital back into the market. Conversely, if Bitcoin falters here, it could embolden bears and create a domino effect of negative momentum, reminiscent of past capitulation events.

If history is any guide, the next few days could set the tone for Bitcoin’s trajectory in the coming months. Should Bitcoin decisively close above the yellow moving average, it would validate a bullish continuation and open the possibility of surpassing previous all-time highs. However, a failure to hold this level might push Bitcoin back into the $50,000s or lower, challenging investor confidence once again. As EGRAG Crypto aptly points out, “This is make or break.” Traders, investors, and institutions alike are watching this week’s close with anticipation. Whether Bitcoin will replicate the bullish follow-through of the first cycle or stumble as it did before the bear market of 2022 is a question that only time—and this candle—will answer.