This week, Bitcoin may face a life-or-death test

Bitcoin may face a big test this week.

Bitcoin has been trading sideways below $40,000 since May and broke through the $40,000 mark in July before trending downward again.

Matt Maley, chief market strategist at Miller Tabak, interpreted the current Bitcoin market situation. Maley believes that the current market thickness is thinner and the trading volume is much lower. The best situation is that Bitcoin can stay above $40,000. If so, Bitcoin's next target will be the 200-day moving average (DMA), and it will stand above the $44,600 mark.

Maley also said that Bitcoin has reached or approached this level twice since May, but both times it reversed again. Therefore, Maley believes that this is resistance for the rebound in early August.

Maley said that if it breaks through this resistance line, Bitcoin will surge quickly. In other words, Bitcoin may need to "take a breath" to break through this resistance line, but if it breaks through this level by any means, Bitcoin's future prospects will be very bright.

But Maley also expressed concerns, saying that this potential bullish view has a drawback because the digital currency looks overbought in the short term, after all, this is a widely watched indicator used to track the magnitude of recent relative gains.

Of course, Maley also said that Bitcoin had become more overbought in January and February of this year and before it broke out in November last year. However, Bitcoin is currently more overbought than its all-time high in April, and if the recent trend continues into next week, investors and traders will have more confidence.