Bitcoin (BTC) has fallen from an intraday high of $45,300 reached on Tuesday and is currently around $43,450. The low bounce has made the momentum seen since the weekend look to slow down.
However, with bullish sentiment regarding the short-term price movements of the flagship cryptocurrency, crypto analyst Rekt Capital said there is likely to be another downturn.
He said that the BTC/USD pair is eyeing a key level, which if reached and turned into support, would indicate that the outlook from long-term investors has shifted in a positive direction. Optimism could be the catalyst for further buying, with the possibility of helping a bullish push toward an elusive breakout to the psychologically important $50,000 level.
Here's what the pseudonymous analyst noted when the price of BTC toyed with resistance around $45,300.
"BTC is slowly approaching the 200-day EMA (black), turning that EMA to support and this would be an indication that long-term investor sentiment is shifting back to bullish on Bitcoin."
He shared the chart below, which shows Bitcoin's recovery after last month's decline and potential breakout to $47,000.
This level represents the 200-day EMA, highlighted by Rekt Capital as one of the leading indicators for long-term investor sentiment towards Bitcoin.
"The black EMA 200 is a long-term measure of investor sentiment towards BTC. The EMA 200 currently represents a price point of ~$47000," he said.
While analysts are optimistic on BTC/USD, he pointed to the chart and EMA 200 versus current price levels to note that bullish sentiment may have to struggle a little before turning the line into support.
If the price of Bitcoin turns the $43k price point into support and breaks above the $45k bid zone, then it is likely that the coin will continue to rise with the highlighted range ($43,100-$51,900).
Crypto analyst Scott Melker shares the same view and says the cryptocurrency has "tapped" into the zone. He was positive about the price of BTC/USD above this level.
Bitcoin also showed a similar recovery as seen during the last correction period (May-July 2021), by rising higher than the lower Bollinger Band on the weekly log. The last time that happened, BTC strengthened to an all-time high of $69k.