Following a recent pullback in the crypto market, Bitcoin (BTC) is now trying to recover from a one-month low. Some experts are cautioning that the correction has left the digital currency in a precarious position that resembles the beginning of the previous bear market.
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Bitcoin Risks 2022-Like Correction
Over the weekend, Bitcoin experienced a 3.6% intraday drop, closing below its yearly opening price for the first time. Since November, BTC has been trading in the $86,000-$93,500 range on a weekly basis, struggling to turn the range’s resistance into support despite multiple attempts.
After a breakout in early January, Bitcoin surged 11.5% from its 2026 opening price of $87,600, reaching a high of $97,924 two weeks ago. However, the cryptocurrency has now erased all those gains, falling below the key level and ending the week at the lower end of its range.
Notably, market observer Philarekt pointed out that Bitcoin’s current price action is reminiscent of its performance in 2022, drawing parallels between the leading crypto’s behavior at the start of the previous bear market and its current trajectory.
According to the analysis, Bitcoin formed a bear flag pattern after the initial drop from its cycle peak of $69,000. The cryptocurrency tested and rejected the 100-day Moving Average (MA), leading to a pullback towards the lower boundary of the pattern.
In the current scenario, Bitcoin has been rejected from the 100-day MA and is now testing the support line of the pattern. This analysis suggests that the cryptocurrency may see another upward move towards the 200-day MA, around the $100,000 level, before facing further challenges.
BTC Price In Precarious Position
Meanwhile, Rekt Capital highlighted that Bitcoin is currently in a delicate position, emphasizing the importance of maintaining the previous week’s close above the range high. A marginal close beyond a key level can make the subsequent retest structurally precarious, according to the expert.
The analysis also pointed out that Bitcoin faced a significant rejection near the $98,000 level, where the 21-week and 50-week Bull Market Exponential Moving Averages (EMAs) are situated.
This rejection led to the loss of a higher low structure that had been forming similarly to 2021, removing a key support buffer for continued consolidation within the weekly range. The focus has now shifted to the $86,000 support level and the nature of any rebounds from that point.
Rekt Capital warned that weaker rebounds from the range lows could indicate weakening demand, raising the risk of a breakdown below the support level.
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According to historical patterns, strong rejections leading to downside continuation typically occur later in the cycle, towards the end of Q1 or the beginning of Q2. Bitcoin, however, is already testing the lower boundary of its weekly range.
The integrity of this support level is crucial, as an early breakdown would represent a deviation from the typical timing. Currently, the weekly range serves as a critical decision point between sustained consolidation and the risk of further downside, as per the analyst’s assessment.
Featured Image from Unsplash.com, Chart from TradingView.com