- A prominent technical analyst believes the price of Bitcoin hasn’t collapsed yet and is only resetting to build stronger momentum.
Bitcoin (BTC) continues to hit a roadblock at $90K in the charts, as the anticipated Santa Claus rally failed to boost the crypto market. Meanwhile, trader and investor sentiment remains bleak, as the Crypto Fear & Greed Index shows “Extreme Fear” at 23 out of 100 on the scale.
Despite the bearish feels among BTC loyalists, the pseudonymous technical analyst Egrag Crypto recently shared his take on what is really happening in the market. According to him, Bitcoin is not yet in a bear market.
On the contrary, it’s only resetting.
Shorts on Bitcoin Price Not Building Up
Egrag said that if one believes Bitcoin is now in a bear market, it should be heading toward $50K or even $25K over the next 12 to 24 months. However, shorts on the asset are not yet building up because the chart does not confirm such a dim narrative.
The analyst admitted that BTC price has already broken below the weekly 21 EMA (Exponential Moving Average). Still, Bitcoin’s historical actions have proven that it’s not a guarantee of a bear market.
No Loss in Structure
Additionally, Egrag claimed that a loss in Bitcoin’s price structure defines a “true bear market.” But then again, it has yet to break under its dip last spring at $74K.
If Bitcoin maintains its price above that territory, there’s no confirmed structural breakdown. The analyst noted that it’s still holding the line.
Egrag highlighted that a “real bear market” exhibits a drop in an asset’s value, followed by a corrective bounce, rejection at the 21-week EMA, and continuation of its downtrend. Bitcoin hasn’t undergone such a trajectory as of late.
The crypto personality with nearly 100K followers on X reminded his audience that while the corrective rally does not turn into a resistance, Bitcoin has a chance to bounce back strongly. Nonetheless, he warned people to be vigilant over its retests.
Correlation with Equities
The old guard of finance and their memes have recently ridiculed the crypto community as traditional assets like gold, silver, and stock indices have apparently outperformed Bitcoin and major altcoins. But then again, Egrag stated that BTC and equities remain highly correlated.
Their positive relationship gives him the impression that Bitcoin will recover as long as S&P keeps its upward momentum. BTC’s chances of hitting a “true bear market” are lower if S&P does not break its key support levels.
Conclusion
Overall, Egrag assured readers that the price of Bitcoin has not yet collapsed. If it does not fulfill the elements indicating a structural breakdown and maintains its value above the monthly 21 EMA, its movement remains a “correction inside a bigger trend.”
Disclaimer: The analysis and commentary featured in this article are only for informational purposes. They do not constitute financial advice or a product recommendation from the author or the Blockzeit team.
