Bitcoin is currently trading at a crucial technical level — its monthly EMA20 (20-month Exponential Moving Average). This indicator has historically served as a make-or-break point for the market. In previous crypto cycles, a confirmed monthly close below this level marked the beginning of extended bear markets.
Right now, bulls are battling to defend this key line. A monthly breakdown could shift market sentiment dramatically and spark a broader sell-off.
Lessons from Past Cycles
Looking back at the last two Bitcoin cycles, a pattern becomes clear. Both times, a monthly close below the EMA20 signaled the official start of a bear market. However, this wasn’t the first warning sign.
The MACD — a momentum indicator — issued early warnings through a “death cross” on the monthly chart. When this crossover occurred, it often preceded the EMA20 breakdown. In essence, the MACD signaled trouble ahead, but the real confirmation came once the EMA20 failed to hold.
This recurring pattern doesn’t guarantee a repeat, but history shows that ignoring these signals can be costly.
Could This Time Be Different?
While some believe that this cycle might break the historical trend, it’s important to remain cautious. Bitcoin may find strength and bounce from the EMA20, but if it fails to hold, the bears may take control.
Technical traders will be watching closely for a clean monthly close. If the EMA20 support gives way, it may once again confirm the start of a larger downtrend — just like it did in 2014 and 2018.
In crypto, history doesn’t always repeat itself exactly — but as the saying goes, it often rhymes.