Bitcoin’s current framework may be developing in a manner reminiscent of the transition that led to the 2022 bear market. An analyst’s chart on X highlights various technical signals that were present during the 2021–2022 shift and are now resurfacing in 2026. As per the comparison, the market may encounter another downward phase before a definitive bottom is established.
Bitcoin’s Decline Below the 50-Week SMA Indicates Structural Transformation
In the previous cycle, Bitcoin reached its peak in 2021 before eventually dipping below the 50-week simple moving average (SMA). This breakdown signified a pivotal moment in the overall market structure. Following the breach of this level, the price went through a brief consolidation phase where a relief rally briefly emerged, but the recovery failed to reclaim the lost structure. The weakness ultimately led to the prolonged decline that characterized the 2022 bear market.
A similar sequence is now unfolding post the projected 2026 cycle peak. According to @_cryptflow_ on X, Bitcoin recently fell below the 50-week SMA after reaching its peak earlier in the cycle. This metric has historically acted as a significant dividing line between sustained bullish momentum and broader downtrends, indicating that its breach often signals a shift in the underlying strength of the market.
The chart also illustrates a similar reaction post the breach. In both cycles, the price stabilized temporarily after slipping below the moving average and tried to bounce back. However, these rebounds failed to reclaim the lost level, maintaining the broader downward structure.
This phase is depicted in the chart with a consolidation box forming post the breach of the 50-week SMA. This zone represents a relief rally phase where the price endeavors to recover but struggles to regain momentum. In the previous cycle, this temporary stabilization was followed by another significant decline, implying that the current structure may evolve similarly.
Relative Strength Index (RSI) Signals Shift to Bear Market
Apart from the price structure, the chart also points out the RSI’s behavior. During the previous market transition, the RSI falling below the 45 level marked the start of a sustained bearish phase, distinguishing bullish momentum from a period of prolonged weakness.
A similar pattern is emerging again, with the chart indicating the RSI recently dropping below the 45 level, mirroring the momentum decline that preceded the extended 2022 drop. This shift implies that the underlying market strength may already be waning as conditions move away from the bullish atmosphere seen in the earlier cycle stage.
The RSI chart also shows a descending trendline that has consistently capped momentum since the cycle peak. Several breakout attempts occurred during the last bull phase, but each failed before momentum reversed. Similar unsuccessful breakout attempts are now evident in the ongoing cycle.
If the broader structure continues to mirror the previous template, the chart suggests that Bitcoin might undergo another downward movement before a definite bottom is established. While cycles rarely repeat exactly, the comparison emphasizes how comparable momentum shifts and structural breaches have typically preceded more profound market corrections.
Featured image generated using Dall.E, chart sourced from Tradingview.com
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