Bitcoin (BTC) sits at a technical crossroads after losing a crucial support level, leading some market observers to suggest that this week’s price will be decisive for whether the flagship crypto can reclaim upside momentum or extend its recent losses.
Bitcoin 21W EMA Retest To Be DecisiveAfter closing the week at around $77,450, Bitcoin started the new week falling to a new local low of $76,050. The cryptocurrency had been trading between $76,300 and $82,500 throughout its May rally, failing to break out of the crucial resistance despite multiple attempts.
He highlighted that a rebound is likely as Bitcoin has now formed a new weekly CME Gap around that area. Therefore, the potential relief rally would turn the 21-Week EMA into new resistance and would also serve the newly formed CME Gap.
“It would turn the old CME Gap area into new resistance; after all, the previous CME Gap served as a Range which has technically been lost given the Weekly Close below the old CME Gap bottom,” the market observer added.
BTC Faces ‘Cascading Dumping’ PatternBased on CryptoQuant data, he highlighted a “clear cascading dumping” pattern in which capitulation from Bitcoin long-term holders triggers panic selling among short-term investors.
Since Thursday, on-chain flows reveal heavy exchange inflows from these holders, with the Spent Output Age Bands (SOAB) ratio for 6–12 month coins surging to 10.54%, far from the normal 1% level. Historically, this has led to large-scale capitulation, increasing spot-market selling pressure that ultimately spreads to short-term investors.
“The current decline is therefore an internally driven market crisis caused by derivative liquidations, large-scale long-term holder capitulation, and cascading panic from short-term participants,” he concluded, affirming that “until this toxic supply is fully absorbed and sentiment stabilizes, a rapid V-shaped recovery remains unlikely,” and investors should avoid aggressive dip-buying.
