The 2022 Bitcoin crash has been one for the history books, where the price went from $69,000 to $16,000 before hitting a bottom. Being the most recent bear market before the current cycle, there have been a lot of comparisons between the current trend and the previous one. So far, while the Bitcoin price has tried to hold up against the bears, there have been similarities to the 2022 bear market cycle that could suggest a repeat of such a crash.
The Similarities That Say Bitcoin Price Might Crash Further
A pseudonymous crypto analyst who goes by the name Sherlock on X pointed out multiple similarities that have popped up on the Bitcoin price chart that could suggest a repeat of the 2022 cycle. The first of these was the weekly trendline break that happened after the initial wave of declines. Once this was broken, the floodgates were opened for the bears.
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Next on the list is that Bitcoin has recorded multiple red weekly candles. Then came a relief bounce that led to consolidation in the middle of this trend, as shown by the most recent bounce toward $74,000. This green candle pushed the price toward the next resistance. However, bulls were ultimately rejected from this level, leading to an impulsive break below the trend low.
The last of the events that took place on the chart is the formation of the upper wick candle. Once this was completed and the price was rejected from this level, the next breakdown saw the Bitcoin price crash from $30,000 to $17,500 before the next relief, a 40% price decline.
Presently, the completion of the upper wick candle is the only thing left for the Bitcoin price. Sherlock confirms that the digital asset is actually printing the upper wick candle. If this completes, then it could lead to the same breakdown that was seen back in 2022.
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A repeat of this 40% breakdown from the current level would put the Bitcoin price back into the $35,000 territory. Following through to the end of where the last bear market bottom was established, it would mean falling as low as $30,000 before the sellers are exhausted.
Interestingly, though, this was the last leg down that led to the end of the 2022 bear market. In the next few months that followed, there was a rapid recovery, and in the year following the bottom, the Bitcoin price would go on to hit new all-time highs.
Featured image from Dall.E, chart from TradingView.com
