A widely followed analyst is warning that Bitcoin (BTC) may be mirroring a 2021 bearish pattern that led to a massive collapse in value.
The analyst pseudonymously known as Rekt Capital tells his 562,400 followers on X that Bitcoin is forming a similar macro descending triangle on the monthly chart that preceded a 55% decline in 2021.
“Whenever we see these bases of these triangles take place, they tend to weaken over time. They first establish with the very first over extension. We saw that over extension in 2021 be 100% here. This over extension wasn’t very exuberant, but we saw the rebound that took place afterwards be a little bit more exuberant, but then after that higher high, we just descend into macro lower highs.
That macro lower high taking place, it needs to respect the new found macro downtrend that develops. If this is, indeed, the context of an early stage bear market, then that higher low is going to simply lapse and get invalidated, because we won’t be able to break beyond the macro descending triangle downtrend.”
Looking at his chart, the analysis suggests if Bitcoin drops below the support level around $84,552, which forms the base of the macro descending triangle, it’s likely a confirmation that a deeper correction will occur.
The analyst also says that if Bitcoin breaks out of the descending trendline it would signal a possible bullish reversal.
“Breaking that downtrend, we can become a bit more bullish, but until then, we have more evidence supporting that maybe we’re going to be following 2021.”
Bitcoin is trading at $84,037 at time of writing, down 4.58% on the day.
Follow us on X, Facebook and Telegram
Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Surf The Daily Hodl Mix
Generated Image: Midjourney