BTC: The Bull Case Vs The Bear Case

Every Wednesday, we give our take on current crypto market conditions, provide performance updates for the DeFi20 Index, and look at token-specific charts that catch our eye.

Want daily DeFi insights? Join our Telegram group!

We believe that no newsletter should simply be talking at people. We want to foster productive discussions and have an ongoing relationship with each subscriber. The Telegram exists for exactly that reason.

In today’s Market Pulse, we’ll look at BTC from short-term and long-term perspective to get an idea of where price may go in each time frame.

From a short-term perspective, there are two things about BTC that stand out to me right now.

On the downside, I’m watching for a retest of the $73K level. 

$73K is important because it marks the top of the February 5th capitulation daily candle, and the prior resistance level during the 2-month rangebound trading that followed. Note that the open and close of that daily candle – marked by the green lines in the chart below – were good markers of support and resistance levels during the following rangebound activity.

Additionally, the red line in the following chart marks the new level of resistance, just below $79K. This marks where the price topped before the final capitulation occurred in February.

Another trend to watch on the downside is the retest of the purple MA, which could align with a bottoming out of the MACD trend. The purple MA currently sits at $73.5K, just above the support level:

On the upside, I’m watching for a test of the 200dma, marked by the white line in the chart below. 

Interestingly enough, the 200dma, which has historically been a reliable support/resistance level, is right around the same level as the bottom of the prior range (~$84K).

Not only that, but the 200dma is also very close to yet another key resistance level – the monthly yellow MA. Looking at the chart below, you can see all the times that these two moving averages have served as support/resistance for BTC’s price going all the way back to 2015:

That wraps up what BTC is doing from a short-term perspective — now, let’s look at some long-term charts to see how the rest of 2026 can play out.

For the past several weeks, I’ve reiterated the bullish case for BTC due to its monthly chart pattern. The bull case has to do with the convergence of 2 key factors:

This combination – especially on monthly charts – doesn’t happen often. This style of rebound has only come close to happening 3 other times in BTC’s history. These are marked by the green lines (and yellow line for 2022, as it was not a perfect setup) in the chart below:

In all 3 cases, major rallies followed over the following 2-3 years:

You may have noticed in the earlier resistance level chart that the 200dma is in the process of crossing below the yellow monthly MA.

What’s interesting is that these two events have never occurred simultaneously. Like the bullish monthly setup, this bearish setup has happened 3 times – you can see them marked with red lines in the chart below.

While this setup has coincided with severe monthly drawdowns of 33-38%, one thing stands out to me the most – it’s always close to marking the bottom of the bear market, with the bullish signal flashing 2-4 months later.

This time, I continue to lean in favor of the bullish scenario unfolding, in which case we may see the 200dma simply “bounce off” the monthly yellow MA and move higher. However, I’ll continue to provide coverage each week!

Overall, the DeFi20 Index is down ~2.9% since our last update, consistent with BTC (down 2.9%) and slightly underperforming the altcoin market (down 2.4%). 

After 3 straight positive weeks, a retracement in the Index is unsurprising. And today, we’ll look at 5 tokens showing strong setups to move higher once again in the near future.

PENDLE

In last Wednesday's  Mid-Week Market Check, PENDLE was the DeFi20 Index's top-performing asset with a 24% gain over the prior week. And now, it looks like it's gearing up for another leg higher.

The yellow line (21 EMA) is typically one of the most consistent S/R levels – and PENDLE has been testing it for 4-5 days now. While it hasn’t broken out yet, the pattern that it’s showing typically precedes quick rallies. As long as it continues to hold the yellow MA as support, a breakout looks likely. 

Additionally, the bollinger bands narrowing like this typically precedes quick moves. Since the short term trend continues to be positive, this could be another sign of a rally in the coming days.

JUP 

Since we noted a potential breakout last week, JUP has stood out as a resilient component of the DeFi20 Index. 

Over the past week, it’s had multiple clean tests of the purple MA, and finally had a breakout following a test of the yellow MA on Sunday – this resulted in a ~12% rally in the span of 2 days.

Since then, it’s retraced along with the broader market, and we’re likely going to see it retest the yellow MA or even the purple MA. If it’s able to bounce off of support, we’re likely going to see it continue to make higher highs in the coming weeks.

MORPHO 

MORPHO is also potentially gearing up for the next leg higher. 

While it’s relatively flat over the past week, the price action has been telling.

First, it’s been consolidating below the resistance level of $2-2.15, marked by the green lines. The drop below $1.90 over the weekend was quickly bought, and its price continues to hover just below $2.

Second, MORPHO recently bounced off the yellow MA for the first time since we last covered it 2 weeks ago. It’s currently “stuck” in between the yellow MA and resistance range – if it can hold above the yellow MA, it could easily break out to the top of the resistance range. I expect it to make a move in either direction before next week’s issue.

CFG 

CFG has settled down a bit since topping out at $0.30 over the past 9 days, and it now looks like it’s setting up to bounce again over the next week.

The token is still in a clear uptrend, and 2 developments may converge to form a strong bounce indicator

If these two trends continue, we may see the MACD trend reverse just as the price tests the purple MA once again. This is exactly what happened in late March when we first covered the price action (marked by the green line), and the price rallied over 100% from that point to the top. CFG’s price is still up over 40% since then, and we’re watching this closely for the next leg up.

HYPE

HYPE also may be gearing up for a bounce in the next few days.

Like CFG, HYPE’s price is approaching the purple MA as its MACD moving averages approach 0. In this type of situation, I’m watching for a bounce off the purple MA that coincides with a reversal in the MACD trend. 

This setup is exactly what happened at the beginning of this month, which we called in that week’s Mid-Week Market Check. That setup preceded a ~30% bounce in just a 2-week span, and while HYPE has retraced since then, it’s still up 11% since the bounce.