Bitcoin Analysis: Significant Downside Risk from the 200-Week EMA Resistance

Technical analysis from experts indicates that Bitcoin is currently under significant downward pressure. According to renowned analyst Rekt Capital, this cryptocurrency risks experiencing a decline similar to those in 2018 and 2022 if it fails to hold key technical support levels. Currently, Bitcoin is trading at $66.08K, still far from major resistance levels.

Why Is the 200-Week EMA Important?

The 200-week EMA, currently around $68,300, is considered a critical defensive line for Bitcoin. This isn’t just a random figure — it represents a long-term moving average that helps identify the main trend of the market. When Bitcoin falls below this level, experience from multiple market cycles shows that a strong buying effort is needed to reverse the situation.

Analyst NS3.AI recently announced that Bitcoin closed above this important level, temporarily preventing a full-blown sell-off confirmation. However, this does not mean Bitcoin is out of danger. The market remains sensitive, and any selling pressure could trigger further declines.

Current Price Context and Resistance Levels

At the current price of $66.08K, Bitcoin must break through key resistance levels to turn the negative outlook around. The roughly $2,000 gap between the current price and the 200-week EMA indicates there is still room for further decline. To avoid a larger drop, Bitcoin needs strong upward momentum, not just small rallies.

Analysis suggests that without institutional investor participation or positive events, Bitcoin may continue to face pressure from short-term traders. Resistance levels need to be re-tested, and it’s unclear whether the market has enough buying power to defend these levels.

Lessons from Past Declines

Previous Bitcoin drops often started with a breach of important technical support levels like the EMA. In 2018 and 2022, when Bitcoin fell below the 200-week EMA, subsequent sharp declines drove prices significantly lower. Therefore, traders should closely monitor whether Bitcoin can sustain this support. This analysis emphasizes that these historical warnings remain relevant and should not be ignored.

Despite the complex situation, the analysis indicates that Bitcoin still has a chance to reverse its trend if positive news or new capital flows emerge. However, until then, the cryptocurrency remains vulnerable to downward pressure.