Over the past week, Bitcoin (BTC) has finally broken out of a long consolidation phase and moved decisively above $90,000. During this period, the leading cryptocurrency traded as high as $94,700 before a sudden rejection sent the price moving within the $90,000-$92,000 range. Amid this small consolidation, a market analyst who goes by the username OnChain has identified clear signs of structural market weakness that support the possibility of a bear market.
Bitcoin on-chain, technical indicators combine to paint a bearish picture.
OnChain explains in CryptoQuant’s QuickTake post that Bitcoin is showing early signs of structural weakness on the weekly chart, similar to what occurred in 2021-2022. Analysts confirm this theory by referring to a combination of price-based technical indicators and on-chain demand indicators to determine the correct market situation. This includes 4 fixed VWAPs (2021 ATH, 2025 ATH, 3rd halving, 4th halving), SMA50, realized price – UTXO age band (6-12 months) and Bitcoin apparent demand.
Applying these indicators to the Bitcoin weekly chart highlights areas where the current market and 2021/2022 price structure are similar. In particular, in Zone 1, as seen in the chart below, we observe that for the first time Bitcoin is simultaneously trading below the average price since the last all-time high (constant VWAP) SMA50 and the realized price of coins held for 6-12 months. When BTC fell below all of these levels for the first time in the previous cycle, it signaled not a simple correction but the start of a broader weakening phase.
In Zone 2, OnChain reports that Bitcoin found support at VWAP, where it was pegged in both cycles until the second-to-last halving of each cycle. After the price correction was halted, BTC attempted a mini-rebound in 2022, but was stuck in a downward trend for several months after facing strong resistance across all indicators in Zone 1.
According to market analysts, the indicator highlighted in Zone 1 is currently positioned around $98,000-$101,000, suggesting the next major resistance point. Meanwhile, all of the reported price action is occurring as Bitcoin apparent demand continues to plummet, suggesting a noticeable lack of buying pressure. OnChain notes another similarity: apparent demand is also approaching negative territory, similar to 2021-2022.
BTC Market Overview
At the time of writing, Bitcoin is trading at $90,500 after falling slightly by 0.58% over the past 24 hours. Meanwhile, the monthly loss rate was 1.9%, indicating that the bulls continue to struggle to control the market. While there are worrying signs of growing market weakness, there are also potential positive developments. One of them is the Clarity Act, highlighted by OnChain, whose potential impact once enacted is largely unknown.
Featured image from Pixabay, chart from Tradingview
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