Bitcoin (CRYPTO: BTC) may have staged a powerful August recovery, but it still needs to clear a critical structural hurdle before confirming a new bull market, according to analysts.
Is Bitcoin Repeating 2023?
Widely-followed trader Jackis said Wednesday that Bitcoin’s August breakout decisively reclaimed the 200-day moving average, rapidly shifting sentiment from fear to extreme greed.
While the move strengthened the case that Bitcoin’s bottom may already be in, the trader said BTC technically remains in a higher-time-frame bear trend.
He pointed to Bitcoin’s May high as the key level separating the competing bullish and bearish scenarios.
Bitcoin has yet to break and gain acceptance above that high, leaving the market inside a broader seven-month range.
Jackis sees similarities between today’s setup and Bitcoin’s recovery from its 2022 bear-market bottom.
Bitcoin reclaimed its 200-day moving average in early 2023, retested it and then pushed higher to establish a new higher-time-frame uptrend.
The key difference today is market structure. In 2023, Bitcoin had already broken a major higher-time-frame high before reclaiming the 200-day average. This time, that breakout has yet to occur.
Until Bitcoin clears the May high, Jackis said the current structure could instead resemble an inverse version of the 2023 setup, keeping further downside in play.
Bitcoin’s Bottom Signals Conflict
On-chain and technical indicators are also sending mixed messages.
A weekly bullish divergence resembles the signal accompanying Bitcoin’s 2022 bottom, while the amount of BTC supply sitting at an unrealized loss has reached levels historically associated with cycle lows.
However, those losses have not yet been broadly realized, a capitulation event that accompanied previous Bitcoin cycle bottoms.
Jackis cautioned against declaring either a confirmed bottom or guaranteed downside while those signals remain divided.
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