Bitcoin is at a critical point

About three weeks ago, Bitcoin closed the week with a Doji candle, which is often a sign of market indecision.

What made that week particularly interesting was that despite a brutal dump down to $78K early on, Bitcoin clawed its way back and still managed to close the week within its long-standing range—a range it's respected since November 2024.

At the time, we outlined two possible scenarios for Bitcoin’s next move:

Scenario 1: The Bullish Breakout

If Bitcoin closes the following week above the Doji candle, it will create one of the most bullish setups we could hope for.

Historically, similar setups have resulted in strong rallies.

However, there is a caveat.

We needed that bullish confirmation first: a clear weekly close above the previous week’s Doji candle.

Scenario 2: The Bullish Breakout

If Bitcoin fails to close above the previous week’s Doji candle and its range low at $93,500k, it’ll indicate that the bears are in control.

Given that Bitcoin has respected this range since November, a breakdown below it would serve as a significant warning sign.

However, we also noted that if this breakdown occurs, we expect Bitcoin to attempt to reclaim the range low in the coming weeks, trying to convert it back into support.

If Bitcoin is unable to reclaim the range low, we recommend moving to stablecoins and waiting for a better opportunity to re-enter the market.

Well, Bitcoin Closed Below the Doji Candle and Broke It’s Range Low

Unfortunately, the breakdown happened. Bitcoin closed the previous week’s doji candle and also closed below the range low.

But here’s where it gets interesting—we’re now seeing major signs of Bitcoin finding its bottom.

Since the start of this bull market, the 50-week simple moving average (SMA) has served as a safety net for Bitcoin.

Each time the price has dipped to touch the 50-week SMA, it has marked a local bottom, especially during significant sell-offs.

We are currently witnessing a similar setup forming.

Add the RSI into the mix, and the confluence is hard to ignore.

Historically, when the RSI hits around 44.74 and Bitcoin touches the 50w SMA, it has marked the local bottom for Bitcoin.

Now, this doesn’t mean that Bitcoin will immediately blast off, we think Bitcoin might consolidate here a bit longer or even come back to retest the 50w SMA one more time before any massive takeoff.

But if history is any guide, the bottom is likely in, and a move back toward $93,500k is on the table.

What About Bitcoin Dominance (BTC.D)?

Here’s where things get spicy for the Altcoin market.

We’re seeing a clear bearish divergence on the weekly BTC.D chart. While Bitcoin Dominance is making higher highs, the RSI is printing lower highs.

It’s only a matter of time before BTC.D breaks down—and when it does, Altcoins should finally catch a much-needed break and rally.

Timing, of course, is the tricky part. This is a weekly chart, so this divergence could take time to fully play out. But the setup is there.

What You Should Watch Next:

• If Bitcoin rallies back to $93K: Watch that level like a hawk. We need a weekly close above it. If BTC gets rejected again, it might be time to play defense—sell some Bitcoin, move into stables, and wait for better conditions.
  

• If Bitcoin breaks below the 50w SMA: That’s a major red flag. It would be the first time this cycle that Bitcoin loses that support. If it happens, it likely opens the door to a drop into the low $70k.

We lean bullish here. We think Bitcoin will hold above the 50w SMA, consolidate a bit, and eventually make a run back toward $93,500k.

The next few weeks will be crucial.

That’s all we got for you today.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions.