As Bitcoin (BTC) hovers near its lowest level since late 2024, one market observer suggests the leading cryptocurrency may not have bottomed out yet, with more downsides potentially ahead.
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BTC’s historical data points to a longer correction
On Wednesday, analyst Rekt Capital compared Bitcoin’s current price action to its performance in previous cycles to determine how close the leading crypto market could be to a bottom.
In a video analysis at Notably, during the last cycle’s correction, Bitcoin bottomed 22% from its 2017 peak. Now it is trading about 14% below its 2021 peak of $69,000, which could indicate that the bottom is approaching.
However, the analyst confirmed that this metric alone “does not represent the mosaic of data that we need to pay attention to.” He stated that the duration of previous bear markets is a crucial indicator to take into account, noting that historically, Bitcoin bear markets typically last at least a year, and sometimes last even longer.
For example, the flagship crypto took around 365 days to complete its full correction phase during the 2021-2022 bear market. The current pullback has lasted about 240 days so far, which would deviate from historical behavior and make it significantly shorter than previous cycles if the bottom is already reached or close to it.
If the current cycle follows a similar timeline to the previous one, BTC could have at least 120 days left in the corrective phase, with the bottom likely to occur around October and the possibility of further extension if the cycle reflects longer historical patterns.
Bitcoin bottom another 20% lower?
The analyst emphasized that while the duration of the bear market is important, the depth of the retracement is another crucial factor. During the last cycle, Bitcoin fell 77%, while during the 2018 bear market it fell 84%.
Nevertheless, the pullback has only reached 53% so far this cycle, suggesting there may still be room for additional downside. Based on this, he highlighted the trend of shallower bear markets, where the depth of the correction gradually decreases by about 7%-10% each cycle.
If this pattern repeats, Bitcoin could see a potential retracement of almost 70% this cycle, which would put BTC’s bottom in the high $30,000 range. If the trend accelerates towards a 10% decline, the bottom could form near the low $40,000 area.
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These factors point to a critical period in the next four to five months, the analyst confirmed, during which further declines of up to 20% remain possible. He noted that historically, similar phases have included periods of consolidation followed by additional declines before the final bottom formed.
Ultimately, Rekt Capital claimed that this period is crucial as it lays the foundation for the next bull cycle. “This bear market here (…) precedes a whole period of multi-year upward trend. And I think that’s why it’s important to focus on the importance of the bottom of this bear market in the coming months, because then we will see a multi-year period of upward momentum,” he concluded.
Featured image from Unsplash.com, chart from TradingView.com