Bitcoin (BTC) Warns Despite 25% 'Bull Pillar'... "May High Breakout First Before Bull Market Return"

▲ Bitcoin (BTC)/ ChatGPT generated image

Bitcoin (BTC) surged 25% in August, but an analysis suggests that it must break above its May high to confirm a return to a bull market.

According to Benzinga on September 2 (local time), crypto trader Jackis analyzed that Bitcoin decisively reclaimed its 200-day moving average during its August rally. Investor sentiment also quickly shifted from fear to extreme greed. However, he pointed out that Bitcoin is still in a bearish trend on higher timeframes.

Jackis identified the May high as the biggest watershed. Bitcoin has not yet broken above that high and solidified it as support. This explains why the price has remained within a large range that has lasted for about seven months. He believes that it is difficult to confirm a new bullish trend until the May high is surpassed.

The current trend resembles the 2023 rebound, but there are also crucial differences. At that time, Bitcoin broke out of the 2022 bear market low, recovered its 200-day moving average, re-tested it, and continued its upward trend. Back then, it had already broken major highs on higher timeframes before reclaiming the 200-day line. This time, that breakout has not yet occurred. Jackis believes that if the May high is not surpassed, a trend opposite to 2023 could emerge, leaving open the possibility of further declines.

Bottom signals are also mixed. On the weekly chart, a bullish divergence similar to that seen at the 2022 low appeared. The supply of Bitcoin in an unrealized loss state also increased to levels observed at past cycle bottoms. However, a large-scale capitulation, where loss-making holdings lead to actual selling, has not yet occurred. In past major cycle bottoms, such capitulation accompanied the bottoming process.

Jackis emphasized that current indicators alone should not be used to confirm a bottom or definitively predict further declines. While the 25% surge in August and the reclamation of the 200-day moving average are bullish signals, he believes that a mid-to-long-term trend reversal has not been confirmed until the May high is broken.

[Key Article Summary]

-Bitcoin surged 25% in August, reclaiming its 200-day moving average, but a bearish trend still remains on higher timeframes.

-Jackis identified the May high breakout as the biggest watershed for confirming a new bull market.

-Weekly bullish divergence and unrealized loss volume show bottom signals, but the large-scale capitulation seen at past bottoms has not yet been confirmed.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*