The Pi Cycle Top Indicator plots two lines: a green moving average which is a multiplier and the orange 111 days moving average.
On August 7, BTC broke past the orange 111-day moving average of the Pi Cycle Top indicator. However, whenever there is a breakout beyond the 111-day moving average resistance, retests are quite likely going forward.
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On the same day, Rekt Capital, a cryptocurrency trader and analyst author of the Rekt Capital Newsletter, was quick to note the breakout and warn of a short-term retest or a midterm retest. Rekt Capital said in a tweet:
“A retest attempt of it in the short-term would be bullish but it doesn’t even have to happen. A mid-term retest of the MA would be more important in confirming a Bull Market return.”
Shortly after the breakout above the 111-day MA, the market retraced to test the confluent major demand zone at about $45,229. It then went ahead to break down from the confluent demand zone to revisit the Pi cycle 111-day moving average that coincides with the $39,000 mark which was the previous range high.
On Tuesday, Bitcoin rebounded higher although it failed to hold on to its gains as the day progressed. In a separate tweet on Tuesday, Rekt stated:
“Now that #BTC has successfully retested the Pi Cycle 111-day MA as support… It’s all about the follow-through now. Because $BTC has recently broken down from the green support area & needs to break back above it to reclaim it as support to avoid downside”
At the moment, for the retest to be sustained and for the price to recover the downside that we have seen in the past few days, the BTC price has to break back above the support region at mid-forties or otherwise it could turn to be a major resistance and we could see prices sliding way down.
Also, if there is a successful mid-term retest of the 111-day moving average, it would signal Bitcoin (BTC) returning to a bull market.
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