Bitcoin Multi-Week Dip Nears Crucial 50-Week EMA: Analyst Says “This Is the Moment”
Bitcoin's price has dropped to $103,700, extending a decline from its all-time high of $126,100 a month ago, with the 50-week EMA acting as a crucial historical support zone around $101,000. Analysts are debating whether Bitcoin will follow its past rebound patterns or fall further, with some predicting the next major support at $92,000 due to weak demand, whale selling, and macroeconomic factors like a stronger US dollar. On-chain data shows short-term holders are in capitulation, indicating potential buying opportunities for long-term investors, though Bitcoin ETFs recently experienced significant outflows, further contributing to price weakness.
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Bitcoin's Continued Decline and Focus on Key Technical Level
Bitcoin continues its multi-week decline, reaching $103,700 today. Attention is now shifting toward a technical level that has repeatedly influenced its long-term trend. Analyst Lark Davis highlighted that Bitcoin is nearing the zone which triggered several major rebounds since early 2023. This level, the 50-week EMA, has historically acted as a critical support for the cryptocurrency.
Significance of the 50-Week EMA
According to Davis, Bitcoin's 50-week Exponential Moving Average (EMA) has served as a strong support zone for nearly two years. Each time Bitcoin has dipped toward this line in the weekly chart, market sentiment collapsed, but the price ultimately rebounded.
Davis explained that this level, currently around $101,000, has been a lifeline during past corrections. He shared a chart highlighting the trend while posing a pressing question:
“Will history repeat itself? Or will it be different this time?”
Market Caution Amid Bitcoin's Retreat
Bitcoin recently reached an all-time high of $126,100, but it has since tumbled over 17%, raising concerns among investors. The Fear and Greed Index has plunged to 27, significantly lower than the neutral mark of 42 just a week ago.
Traders now watch closely as Bitcoin edges closer to the 50-week EMA, a critical level that could dictate future price movements. Concerns grow over whether Bitcoin will follow historical trends or continue its downward trajectory.
Potential Support Levels and Market Sentiment
As Bitcoin revisits the $103,000 level, some traders warn of a potential drop toward the $92,000 support zone. Investor Ted Pillows described the situation as a “free fall.”
Meanwhile, Daan Crypto Trades noted that Bitcoin has lost key support due to whale selling, weaker U.S. stocks, and a stronger U.S. dollar. Additionally, on-chain data from Glassnode reveals short-term holders are entering capitulation, with unrealized losses hitting their worst since April. Historically, such conditions have pointed to buying opportunities for long-term investors.
Factors Impacting Bitcoin’s Performance
Analysts point to insufficient demand as a key factor in Bitcoin’s recent struggles. According to CryptoQuant’s Julio Moreno, the current market is not able to absorb supply at higher prices. Over the last few weeks, this lack of demand has resulted in falling prices.
Moreno explained in a tweet:
“Is there enough demand to absorb the supply at higher prices? Since a few weeks ago, the answer is no, and that is why we see prices declining.”
Adding to the pressure, Bitcoin ETFs have shown more outflows than inflows, with over $1 billion worth of BTC sold in the last four trading days. This trend underscores the challenges impacting Bitcoin's price stability.