Is Bitcoin Losing Its Bull Market Support Band?

TL;DR

Bitcoin has fallen below its bull market support band, but it is too early to conclude that the bull market is over. The band consists of the 20-week SMA and 21-week EMA, while three earlier breaks this cycle lasted seven, nine, and eleven weeks. Fourth-quarter timing raises the possibility that the approximately $126,000 peak was the cycle top, so read on for the competing signals and year-end outlook.

Transcript

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Key Insights

• Bitcoin is currently below its 20-week simple moving average and 21-week exponential moving average, collectively treated as the bull market support band. Comparable breaks occurred in the third quarter of 2023, the third quarter of 2024, and early 2025.
• Previous support-band breaks lasted approximately nine weeks, eleven weeks, and seven weeks. The present break is only in its first couple of weeks, so the historical pattern allows for Bitcoin to remain below the band for considerably longer without creating an unprecedented cycle event.
• Bitcoin historically ends its cycle in the fourth quarter of the post-halving year, according to the cyclical framework presented. The analyst therefore considers a current-quarter top more likely than a cycle extending through 2026, while acknowledging that the four-year pattern could eventually fail.
• The current Bitcoin peak is approximately $126,000 and followed a new all-time high in October. Its timing and return from the cycle low are broadly consistent with the previous two cycles, making it difficult to dismiss the possibility that the market top has already formed.
• Several market-top indicators have not reached their expected extremes, including the Pi Cycle Top indicator, risk metrics, fear and greed measures, and terminal price. Their failure to trigger supports short-term flexibility, but it does not prove that another major advance must occur.
• Quantitative tightening may have limited the breadth and magnitude of the cryptocurrency rally. The current monetary environment is described as more similar to 2019 than to the previous cycle, which operated with near-zero interest rates and unusually extensive money printing.
• Bitcoin dominance is slowly trending higher as liquidity rotates away from altcoins and back toward Bitcoin. The analysis expects dominance to rise substantially beyond 60 percent over the following weeks, continuing the cycle's predominantly Bitcoin-led character.
• A parabolic Bitcoin rally remains possible, but the analysis gives it a narrow window of roughly two months. If that move does not occur by year-end, the expected alternative is a transition toward lower highs and a bear market during the following year.

Questions & Answers

Q: Is Bitcoin losing its bull market support band?

Bitcoin has dropped below its 20-week simple moving average and 21-week exponential moving average, which form the bull market support band in this analysis. However, the current break is only in its first couple of weeks, so it does not yet establish that the bull market is over.

Q: What is Bitcoin's bull market support band?

The bull market support band consists of Bitcoin's 20-week simple moving average and 21-week exponential moving average. The analysis tracks whether Bitcoin is above or below one or both of these levels to assess its position within the cycle.

Q: How long have Bitcoin's previous support-band breaks lasted?

The three earlier breaks during this cycle lasted approximately nine weeks, eleven weeks, and seven weeks. Bitcoin has been below the band for only a couple of weeks during the current break, leaving room for it to follow those earlier patterns.

Q: Why could Bitcoin's approximately $126,000 peak be the cycle top?

The approximately $126,000 peak followed a new all-time high in October and occurred during the fourth quarter of the post-halving year. Under the cyclical framework presented, Bitcoin has historically ended its cycle during that quarter, and the timing and return from the cycle low are broadly consistent with the previous two cycles.

Q: Why might Bitcoin still reach another all-time high?

Several expected peak indicators have not reached their extremes, including the Pi Cycle Top indicator, risk metrics, fear and greed measures, and terminal price. The analysis also allows for a final rotation of liquidity from altcoins into Bitcoin, potentially supporting another sharp advance before year-end.

Q: How does quantitative tightening affect the Bitcoin outlook?

The analysis argues that quantitative tightening may have limited the breadth and magnitude of the cryptocurrency rally. It compares the current cycle with 2019, when Bitcoin and Bitcoin dominance rose together during quantitative tightening, while altcoin participation remained limited.

Q: Why is Bitcoin dominance expected to rise?

Bitcoin dominance is expected to rise because liquidity appears to be rotating away from altcoins and back into Bitcoin. The analysis says dominance has been trending higher and could move substantially beyond 60 percent over the following weeks, especially if Bitcoin makes a final strong advance.

Q: What happens if Bitcoin does not rally by year-end?

If Bitcoin does not produce a parabolic rally by year-end, the analysis expects the opportunity for that move to expire for the current cycle. Bitcoin could then begin forming lower highs, followed by a bear market during the next year under the stated cyclical framework.

Summary & Key Takeaways

• Bitcoin is below its bull market support band after spending extended periods above it. Earlier breaks during this cycle lasted nine weeks, eleven weeks, and seven weeks. Because the current break is only a couple of weeks old, its significance remains uncertain, but its fourth-quarter timing creates added cyclical concern.

• The cyclical interpretation assumes Bitcoin tends to top during the fourth quarter of the post-halving year, followed by a bear market during the next midterm year. Under that framework, the recent $126,000 peak could be the top, although the absence of extreme readings from several peak indicators leaves room for another advance.

• The monetary-policy interpretation compares the current cycle with the 2019 rally during quantitative tightening. Both periods featured rising Bitcoin prices alongside rising Bitcoin dominance and limited altcoin participation. A final rotation from altcoins into Bitcoin could still produce a sharp rally, but the analysis expects that opportunity to expire by year-end.