Bitcoin's price action is entering a decisive phase as it grapples with the 50-week moving average, a level that has historically marked the end of bear markets. While intraday trading has pushed the cryptocurrency above this key technical indicator, analysts caution that the lack of a weekly closing price confirmation means a true buy signal has yet to be established. On September 3rd, Bitcoin reached an intraday high of $82,000, briefly reclaiming the 50-week moving average.
Data from Galaxy Research indicates that this moving average has precisely identified market bottoms in four out of five major Bitcoin bear markets. However, exceptions occurred in 2021 and 2022 when prices rallied back to this level only to subsequently record new lows, casting a shadow of uncertainty over the current trend. At present, approximately 68% of the Bitcoin supply is in profit based on current prices, up from 65% during a similar rally in May, which suggests an increased potential for selling pressure.
Where the rally is coming from
According to Glassnode, this recent ascent is attributed to a short squeeze that began in mid-August, propelling prices from $63,500 to near the $80,000 mark. During this period, roughly $2.8 billion in ETF capital flowed into the market. Concurrently, futures open interest has declined while funding rates remain low, suggesting that the move is being driven more by spot buying and short covering rather than leveraged long positions. Although daily ETF inflows peaked at $290 million, secondary market daily trading volume has stabilized around $3 billion, growing at a slower pace than in previous expansion phases, indicating that overall market activity has not yet surged in tandem.
On the macro liquidity front, the U.S. Treasury announced on August 19th that it would at least double the size of its long-term liquidity support repurchase operations, providing initial fuel for the rally. However, QCP analysts view this move as merely liquidity support, far from a comprehensive monetary easing. Federal Reserve official Christopher Waller has noted that fiscal pressures are keeping U.S. Treasury bond yields elevated at 4%, which in turn limits expectations for more accommodative policies.
The bulls' case for continued upside
For Bitcoin to establish a sustainable bull trend, its weekly closing price must hold above the 50-week moving average and defend the $83,000 to $86,000 range to absorb the supply pressure from long-term holders that Glassnode has been monitoring. Should demand, ETF flows, and spot market activity remain positive and withstand profit-taking pressure, Bitcoin has the potential to break through the $83,000 to $86,000 resistance zone. This would open the path toward a $90,000 target, ultimately aiming for the $98,000 high recorded in 2026. In this scenario, the 2021 and 2022 exceptions would become historical anomalies, validating the current breakout.
The bears' case for a reversal
Conversely, if Bitcoin fails to achieve a weekly close above the moving average or loses support and falls back into the $76,000 to $78,000 range, the bearish thesis would gain dominance. Prices could then extend lower to $71,800, eventually settling into the $62,000 to $65,000 accumulation zone, which represents the bottom region before this latest rally. In this scenario, the exceptional patterns of 2021 and 2022 would repeat, redefining August's rebound as a short-covering event lacking genuine buying interest. Bitcoin has broken through a historical bear-market-ending indicator, and the subsequent thousands of dollars in price movement will determine whether sufficient buying pressure exists to confirm this trend. The outcome for bulls and bears alike hinges on weekly closing confirmations and the ability to defend critical support levels.