Bitcoin’s current structure could unfold in a very similar way to the transition that led to Bitcoin. 2022 bear market. chart shared Analyst Comparison shows that the market may still face another situation. Downward phase before a clear bottom is formed.
Bitcoin’s 50-week SMA loss signals a structural change.
During the previous cycle, Bitcoin peaked in 2021 and then eventually peaked. Falling below the 50-week simple moving average (SMA). This collapse marked a turning point in the broader market structure. After losing the level, the price entered a brief consolidation phase during which a brief relief rally unfolded, but the recovery failed to regain the lost structure. The weakness expanded into a prolonged decline that would ultimately define the 2022 bear market.
We now see a similar sequence beyond the expected top of the 2026 cycle. According to @_cryptflow_ on X, Bitcoin peaked early in the cycle and then recently moved below its 50-week SMA. This indicator has historically served as a key dividing line between: Continued bullish momentum And a broader downtrend means losses often signal a change in fundamental forces in the market.
The chart also outlines similar reactions following a failure. In both cycles, the price temporarily stabilized after falling below the moving average, I tried recovery. However, this bounce failed to recover lost levels, leaving the broader downward structure intact.
This stage is illustrated in the chart where a consolidation box is formed after a drop below the 50-week SMA. This zone represents the relief rally phase where the price is trying to recover but not recover. Struggling to regain momentum. In previous cycles, a temporary stabilization was followed by another significant decline, suggesting that the current structure may still evolve in a similar direction.
Relative Strength Index (RSI) hints at market changes
In addition to price structure, the charts also highlight the behavior of RSI. During the previous market turn, RSI’s fall below the 45 level signaled the beginning of a sustained bearish phase, separating bullish and bullish momentum. prolonged period of weakness.
The same pattern appears again on the chart, with RSI showing a recent decline below the 45 level, reflecting a breakdown in momentum before a prolonged decline in 2022. These changes suggest that underlying market strength is already weakening as conditions move further away from the bullish environment that characterized the early stages of the business cycle.
RSI charts also have the following features: descending trend line This has repeatedly limited momentum since the cycle peak. Several breakout attempts occurred during the final upward phase, but each ultimately failed before the momentum reversed. Similar failed breakout attempts are now visible in the current cycle.
If the broader structure continues to reflect the previous template, the chart suggests that Bitcoin may still experience another lower leg Before a transparent bottom is formed. Although cycles rarely repeat identically, the comparison highlights how similar momentum changes and structural breakdowns are. Historically, they have been preceded by deeper market corrections..
Featured image created with Dall.E, chart from Tradingview.com
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