Crypto Analyst Warns: Bitcoin Could Relive 2021 Bull Market Collapse

The world’s largest cryptocurrency Bitcoin continues to face selling pressure with the BTC price staying under $26,000 for quite some while. Bitcoin lacks any major catalyst to pull its price higher with the spot Bitcoin ETFs looking a distant dream for now.

Pseudonymous analyst Rekt Capital said that Bitcoin looks very weak on the technical chart and is ready to break down from the bearish double-top pattern. Thus, any sell-off with increased volumes could trigger a major correction says Rekt Capital. The analyst noted:

BTC is on the cusp of validating its double top formation. A breakout on seller volume and a convincing loss of ~$26,000 followed by turning it into new resistance would confirm the breakdown.

Will Bitcoin Replicate a 2021-Like Crash?

According to Rekt Capital, Bitcoin seems to be replicating its price behavior from late 2021, resembling the period when BTC concluded its previous bull market following a breakdown from a double-top pattern. He added: “In 2021, BTC formed two clear tops akin to a double top before forming the third top at a lower high. Right now, it looks like BTC has once again formed two clear tops, akin to a double top, with a potential third top forming at a lower high.”

Courtesy: Rekt Capital

Rekt Capital points out that the similarities go beyond Bitcoin’s price movements. The cryptocurrency strategist emphasizes that critical moving averages are now serving as resistance for Bitcoin, echoing the situation in 2021.

BTC is currently encountering resistance at the bull market moving averages, which are situated around the $27,000-$28,000 range. These BTC moving averages include the green 21-week EMA (exponential moving average) and the blue 50-week EMA. They are acting as resistance, much like they did in 2021.

The analyst further predicts that Bitcoin will undergo another bounce before experiencing a significant corrective drop toward the $20,000 price range.

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The BTC 2021 fractal implies that BTC may soon establish its third peak at a lower high before rejecting at that point and eventually breaking below the ~$26,000 support.

Following that, the fractal suggests that BTC would rebound briefly but transform ~$26,000 into new resistance before facing further rejection.

September Could Be Bad for Bitcoin

Historically, September has been a month of major decline for Bitcoin. In over a decade of Bitcoin’s history, there have only been two instances where the BTC price has closed in the green i.e. 2015 and 2016. In the rest of the years over the last decade, the BTC price tanked 5-8 percent during the month of September.

If Bitcoin replicates this price action once again, it means that the price could further drop in the range of $23-24K. Popular crypto analyst Michael van de Poppe noted:

The price for Bitcoin around $24,700-25,200 is an important one to eye for potential entry zones as then we’ve got a sweep of the lows being done -> massive bullish divergences to be applied and to be built. If that’s lost, then we’re losing construction and are aiming at deeper, $23-23.5K or even $20K.

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