Bitcoin just touched its 120 EMA on the 3-day chart for the first time since it broke below it in November 2025. This moving average is the one I use to separate bull markets from bear markets, and it has been incredibly reliable at telling us when the low is in and it is once again time to party.
In this article, I will refer to it as the Bull/Bear Line.
The setup so far has been extremely similar to 2022. We saw a vertical move lower, some consolidation, and now a vertical move higher. Everyone, including me, wanted a drop down to buy lower, but Bitcoin rarely makes it that easy and it just broke higher. It loves to leave people behind and not give that solid retest entry until after it has already broken out higher.
In 2022, BTC exploded higher, consolidated just slightly, and then got a solid push back up into the Bull/Bear Line, just like we are doing today. Once it hung out around the Bull/Bear Line for a week or so and after it wicked above its prior highs, it finally gave up and gave us a nice deep retest.
BTC Daily Chart 2022 Low
That retest only came after Bitcoin sucked everyone in, wicked into a new relative high, and got everyone to chase it higher. Then it dropped hard, right into the 50% retracement level of the entire bull move off the bottom.
So far, we are following that exact script. We have yet to make a new relative high into $83,000, but I would not be surprised if that is coming in the next couple of days. If we get a solid close above $83,000, a lot of people will be sucked into the trade for fear of missing out on the path to $1 million or whatever other massive numbers Bitcoin bulls are throwing out as targets.
BTC Daily Chart Present Day
And honestly, that is exactly what I would expect Bitcoin to do if it wants to create the best possible setup for a deeper pullback.
If we close above the Bull/Bear Line and then the next candle closes back below it, consider that a trap. That would negate the bullish close above the moving average.
If that does play out, I will be looking to add long exposure down in the $74,000 to $70,000 range.
It feels insane to think BTC could drop back down to $70,000 after the move we have just seen, but history says that around $71,000 is where it would find support if history repeats itself here.
I do not want to see BTC close back below $70,000, the 200-day SMA, or especially the 200-week SMA. If the first two happen, it would be a big warning. If the third one happens, the bulls are toast and this was just another bear market rally.
The Bigger Picture
The thing to remember is that if the bottom is in on Bitcoin, there is a long bull market ahead of us. It should go much higher over the next couple of years.
There will be deep pullbacks. There will be boring, choppy periods of consolidation. There will also be extremely fun bullish runs where Bitcoin absolutely takes off.
If the bottom is in, we would simply be in the first wave of the next larger push higher.
There is so much time to gain exposure, and there will be all kinds of opportunities and trading setups along the way. We do not need to chase Bitcoin here just because it starts moving higher.
For me, the plan is pretty simple.
I will be selling IBIT puts along the way, buying IBIT shares if we drop down into my buy zone, and trading around the Bull/Bear Line in case momentum really starts to pick up.
I want more exposure, but I also want to take advantage of the volatility that Bitcoin is almost certainly going to give us along the way.
The goal is not to perfectly catch the bottom or sell the tops. The goal is to participate in the heart of the next bull move while mitigating risk.
Bitcoin 3 Day Chart
