As Bitcoin (BTC) trades at its lowest level in months, some market watchers have warned that the leading crypto may be preparing for another big drop as it retests a key technical area that has historically marked a turning point.
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Bitcoin tags are critical for a 200-week SMA after four years
After falling 15% over the past four days, Bitcoin is trying to regain the $64,000 level as support. The flagship crypto has traded between $64,000 and $82,000 since the early February crash, remaining above the top half of the range for almost two months.
However, this week’s broader volatility pushed BTC to the lower end of the range for the first time in months, hitting a four-month low of $61,383 on Wednesday evening.
Amid these achievements, market observer Rekt Capital said marked that the cryptocurrency has tagged the 200-week Simple Moving Average (SMA) for the first time in this bear cycle, which could indicate another correction is on the way.
As he explained, a deviation below this SMA “has historically been the key to building a bottom formation in the bear market.” In June 2022, Bitcoin reached this level during the bear market correction and quickly lost support on the weekly time frame.
After the initial drop below the 200-week SMA, the leading crypto traded sideways, briefly retesting this level before continuing its decline to the late 2022 bear market lows.
Now BTC has hit this key SMA nearly four years later, suggesting a decline to new lows if the 2022 playbook repeats itself. The analyst noted that Bitcoin has been rejected in a critical area and has broken through a key level, another similarity to previous bear market corrections.
According to the post, BTC was rejected from the base of the Macro Triangle after failing to break past the $82,500 area, revisiting the 50-month EMA during the recent decline and currently breaking off from this EMA, a setup that has repeated every cycle before the market bottom.
BTC’s $60,000 Support Is About to Give?
Rekt Capital be shows that Bitcoin rallies from the $60,000 region have gradually weakened since 2024, indicating deteriorating support. While the price rose 113% from this area during the mid-2024 rally, the February 2026 retest only generated a 38% move.
Now, the cryptocurrency is up 4% year to date, “but it is very likely that the recovery from here will be even weaker,” the analyst said, adding that the “$60,000 area will be completely lost as support over time.”
He too declared that during bear markets, Bitcoin tends to form multi-month price clusters, followed by new Macro Lower Highs before spreading out from the clusters to reach new lows.
“The good news is that there are 1-2 such clusters left in this Bitcoin Bear Market, with the Bear Market Bottom being the last cluster,” he concluded.
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Meanwhile, Ali Martinez confirmed that the recent collapse of the $72,000 support has left Bitcoin “in a vulnerable position” as it opens the door for a 25%-30% correction based on the MVRV price bands.
The analyst previously noted that Bitcoin has consistently bottomed between the 1.0 and 0.8 MVRV price bands over the past decade. The next major support area now lies between $54,000 and $50,000, where the 1.0 price range resides.
Featured image from Unsplash.com, chart from TradingView.com