The Bitcoin crash of 2022 was one for the history books, with the price going from $69,000 to $16,000 before hitting a bottom. Being the most recent bear market before the current cycle, there have been many comparisons between the current trend and the previous one. While Bitcoin price has tried to hold its ground against the bears thus far, there are similarities to the 2022 bear market cycle that could point to a repeat of such a crash.
The agreements saying Bitcoin price could crash further
A pseudonymous crypto analyst who goes by the name Sherlock on X pointed out multiple similarities that have surfaced on the Bitcoin price chart that could point to a repeat of the 2022 cycle. The first of these was the weekly trend line break that happened after the first wave of declines. Once this was broken, the floodgates opened for the bears.
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Next on the list is Bitcoin has recorded multiple red weekly candles. Then came a relief that led to consolidation in the midst of this trend, as evidenced by the most recent jump towards $74,000. This green candle pushed the price towards the next resistance. However, bulls were eventually rejected from this level, leading to an impulsive break below the trend low.
The last of the events that occurred on the card is the formation of the upper wick candle. Once this was completed and the price was rejected from this level, the next slump saw the price of Bitcoin fall from $30,000 to $17,500, before the next relief occurred, a 40% price drop.
Currently the completion of the top fuse candle is all that remains for the Bitcoin price. Sherlock confirms that the digital asset is actually printing the top wick candle. If completed, this could lead to the same collapse seen in 2022.
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A repeat of this 40% breakdown from current levels would brought the Bitcoin price back to the $35,000 area. If we continue until the end of the last bear market low, this would mean the price drops to $30,000 before the sellers are exhausted.
Interestingly enough, however, this was the final leg leading to the end of the 2022 bear market. A rapid recovery occurred in the following months, and in the year after the bottom, Bitcoin price would reach new all-time highs.
Featured image of Dall.E, chart from TradingView.com