Bitcoin price has been trending close to long-term trend lines recently. This situation brings the 200-week exponential moving average (EMA) level to the fore rather than short-term fluctuations. This indicator, which is frequently used in market analysis, has played an important role in determining Bitcoin’s main trend and possible turning points in the past.
Historical Role of the 200-Week EMA
In the evaluation made by EGRAG CRYPTO, which closely follows the cryptocurrency markets, it is stated that the 200-week EMA level has played three different functions in Bitcoin history. In bullish markets, this level often served as a dynamic support during price pullbacks, limiting downside movements. During deeper and longer periods of falling markets, this average marked long-term bottoms. From time to time, the price fell below this level for a short time and broke out again, and these regions coincided with periods when the search for direction in the market increased.
Possible Scenarios and Probabilities
EGRAG CRYPTO emphasizes the importance of probabilities and weekly closes when assessing the market outlook. Three possible basic scenarios are mentioned. The base case is given approximately 45-50 percent weightage; Accordingly, Bitcoin price may experience a short-term pullback to the 200-week EMA and regain this level at the weekly close. In the past, such movements were seen during periods when the market regained strength.
The second possible path stands out with a probability of 30-35 percent, where the price is expected to move down faster and sharply, with a one- or two-week close below the 200 EMA and a rapid recovery immediately afterwards. This behavior is characterized by strengthening selling gathering liquidity and then buyers stepping back in.
In the third and less likely scenario, Bitcoin’s price may experience a steeper decline in the 35-39 percent range, as in 2022. In this case, the price may remain below the EMA level for a longer period of time and its average slope may turn horizontal or downward. However, EGRAG CRYPTO states that this would require a large-scale liquidity shock and that there is no such sign at the moment.
Key Indicators to Monitor
In the analysis in question, market followers are advised to follow structural signs rather than focusing on the percentage decline. First of all, attention is drawn to whether the price is above or below the 200-week EMA level at the weekly close. Moreover, the speed of recovery of the probable level, the direction of the EMA and the recovery trends in the short term coincide with periods of accumulation in the past. If the price starts to stay below this level, there is a risk of a deeper decline.
This approach indicates that instantaneous volatilities are insignificant and the main indicator is the weekly closing.
In the analyzes highlighted by EGRAG CRYPTO, it is emphasized that the Bitcoin market has not yet entered a decisive phase and that measuring the path of the price and the patience in the market is the most important factor. At this stage, it is stated that the long-term structure remains strong and weekly closings will shape the coming period.
