A warning from Bitcoin’s weekly chart shows a familiar one bear market structure is starting to take shape. According to the weekly chart’s technical analysis, Bitcoin has already gone through a distribution phase at the top and a range phase below, and the current price action now forms a redistribution zone.
The concern is that a similar setup appeared after the 2021 peak, before Bitcoin experienced a much deeper decline. The last time this scheme appeared, it wiped out almost 80% of Bitcoin’s value in less than a year.
Bitcoin chart according to 2021 breakdown structure
The analysis compares Bitcoin’s current weekly chart showing the structure that developed during the 2021 to 2022 bear market. In that previous cycle, Bitcoin first created a distribution zone at the top. The price then entered a range phase below that high, creating the appearance of stabilization before the market rolled into a redistribution zone.
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The first phase in 2021, a distribution phase, took place when Bitcoin reached its then peak of almost $69,000. In the current cycle, the same pattern manifested itself around the $108,000 to $126,000 zone, forming a broad but defined top. The second phase was a Range phase, a small consolidation band directly below the distribution ceiling, where the price stabilized before the next step.
The third phase, and the one that may be forming now, is Redistribution. This is the structure that immediately preceded the 2021 crash. It is a secondary range, lower than the first, where sellers reassert control before a decisive collapse occurs. In 2021, the conclusion of this redistribution phase was the final exit point before the Bitcoin price fell 78% over the following eight months.
Bitcoin weekly price chart. Source: @degargoyle On X
Is this a sell signal?
The question now is whether this is a sell signal, but the graph does not provide a simple answer. What it does show is a warning against assuming that the recent rise above $80,000 is the right one start of a run to a new all-time record. At the time of writing, Bitcoin is trading at $79,800. The redistribution phase, if confirmed, does not guarantee a 78% or fixed magnitude crash. But a repeat of a 78% crash from the current price level will cause the Bitcoin price to fall below $25,000.
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However, it is also important to note that Bitcoin’s fundamentals and structural environment in 2026 bear little resemblance to the situation that existed when the last crash occurred. When Bitcoin hit its all-time high of $126,000 in October 2025, the rally was driven by strong ETF inflows and favorable regulatory conditions, institutional pillars that did not exist four years ago.
Market Sentiment is neutral againand the more balanced interpretation is that Bitcoin is now in a confirmation zone. A strong weekly claim above $84,000 would weaken the sell signal and indicate that buyers are in full control.
Featured image created with Dall.E, chart from Tradingview.com